Abstract
Goal – The main objective of the paper is to verify if the relation between the election cycles and the number of tax reliefs in Poland exists and – if it exists – what is its direction and strengh. Hypothesis – Election cycles affect the dynamics of introducing tax reliefs into the Polish Personal Income Tax. Research methodology – The research hypothesis was verified by assessing the cyclical fluctuations of the trend function describing the number of reliefs in the Polish Personal Income Tax. The study covers the years 1991-2018. The authors’ own calculations made on the basis of the legislative changes made in the studied period to the Act on Personal Income Tax of 26th July 1991 provide the source material for the research. Score – The study confirms positive relation between the election cycles and the dynamics of introducing tax reliefs into the Polish Personal Income Tax. The number of tax reliefs in personal tax cyclically fluctuates and, moreover, the total number of introduced tax reliefs is significantly higher in the election years and lower in the other accordingly.
Highlights
Political incentives in modern economies are listed among the major determinants influencing the shape of fiscal policy
The objective of the research analyzed in this paper is to study the existence, direction and strength of the relationship between the election cycle in Poland and the number of tax reliefs introduced in the personal income tax
The realization of this objective was possible thanks to the verification of the research hypothesis which implies that election cycle affects personal income taxes in Poland by shaping the dynamics of the degree to which tax reliefs are used in the personal income tax
Summary
Political incentives in modern economies are listed among the major determinants influencing the shape of fiscal policy. This dependence ought to be noticeable in tax policy, which often becomes one of the most important elements of the programs of particular parties during election campaigns, which is noticeable in the promises to reduce tax rates or to introduce new tax reliefs.
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