Tributes Paid through Special Taxes
Tributes Paid through Special Taxes

Populism and the Displacement of “Aliens”

Author(s): Károly Soós
Subject(s): National Economy, Business Economy / Management, Present Times (2010 - today), Fiscal Politics / Budgeting
Published by: Central European University Press
Keywords: Hungary; Orbán;Fidesz;Market economy;taxes;mobility;
Summary/Abstract: Certain economic activities cannot be performed competitively from abroad, or at least not at a reasonable cost. Governments can abuse the low mobility of the companies performing these activities, extracting tribute from them through special taxes. These kinds of special taxes, however,are alien to market economies and are essentially unknown in Western Europe. Yet, Hungarian governments since the mid-2000s have discovered and experimented with the possibilities of tribute extraction. Since 2010,the Fidesz government has put itself into a difficult position with respect to increasing revenue by its odd tax cuts and rejection of appropriate cuts to public spending, and it has made the special tax tributes, which now generate nearly two and a half times more revenue than the standard corporate income tax, a key element of the tax system.

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