JAHODA, Robert and Jana GODAROVÁ. Distribution impact of the mortgage interest deduction in the Czech Republic. Review of European Studies, 2014, vol. 6, No 2, p. 110-119. ISSN 1918-7173. doi:10.5539/res.v6n2p110.
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Basic information
Original name Distribution impact of the mortgage interest deduction in the Czech Republic
Authors JAHODA, Robert (203 Czech Republic, guarantor, belonging to the institution) and Jana GODAROVÁ (203 Czech Republic, belonging to the institution).
Edition Review of European Studies, 2014, 1918-7173.
Other information
Original language English
Type of outcome Article in a journal
Field of Study 50200 5.2 Economics and Business
Country of publisher Canada
Confidentiality degree is not subject to a state or trade secret
RIV identification code RIV/00216224:14560/14:00073596
Organization unit Faculty of Economics and Administration
Doi http://dx.doi.org/10.5539/res.v6n2p110
Keywords in English microsimulation; personal income tax; revenue forgone method; EU-SILC; tax expenditure
Tags International impact, Reviewed
Changed by Changed by: doc. Ing. Robert Jahoda, Ph.D., učo 16912. Changed: 2/6/2017 15:42.
This paper focuses on the mortgage interest deduction for owner-occupied housing in the Czech Republic. The main research question concerns the distribution of personal income tax liability given the rather generous interest deduction for owner-occupied housing loans and changes to it when restrictions are placed on the interest deduction in 2014. We used data for the Czech Republic from the EU-SILC surveys for our analysis. We estimated the value of this tax expenditure at approximately CZK 4.1 billion in 2011, with more than half the amount spent by the lowest two deciles in income distribution. Personal income tax reform is legislated to begin in 2014, one part of which will be a cap on loan interest. This reform will lead to a decrease in the yearly value of the tax expenditure but will be followed by an increase in the PIT rate. Taken together, this will generate greater tax expenditures. Our computations show that the impact will be negative on households in the highest decile, while other groups will feel some benefit.
GAP403/12/0366, research and development projectName: Identifikace a evaluace regionálně specifických faktorů úspěšnosti reforem v duchu NPM ? země CEE
MUNI/A/0784/2013, internal MU codeName: Vybrané aspekty hodnocení efektivnosti a zásluhovosti veřejných politik (Acronym: Aspekty VEPO)
Investor: Masaryk University, Grant Agency of Masaryk University, Category A
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