European Financial and Accounting Journal 2011, 6(4):60-84 | DOI: 10.18267/j.efaj.20

Fiscal Instruments of a Support of the Families with Children and their Changes in Developed Countries

Leoš Vítek
Doc. Ing. Leoš Vítek, Ph.D. - associate professor; Department of Public Finance, Faculty of Finance and Accounting, University of Economics, Prague, W. Churchill Sq. 4, 130 67 Prague 3, Czech Republic; <leos.vitek@vse.cz>.

Governments usually try to use fiscal instruments to support the families with children. However, fiscal instruments also affect the work effort and labour demand. Problems associated with (de)stimulantive effects of taxes, insurance premia and benefits arise, among other things, also due to the fact that because of various reasons, these instruments are not effectively coordinated and often operate in opposite directions. The article analyses changes in fiscal instruments of a support of the families with children in developed countries over the past decade and focuses on the development of selected tax-benefit indicators that describe the fundamental characteristics of the taxation of the families with children. Given that the universal, family-type social benefits often take the form of negative taxes, the paper includes also this type of family benefits. The results of the analysis show that the vast majority of developed countries strongly support the families with children via fiscal instruments. It also turns out that over the past decade the governments have rather reduced effective taxation of the families with children. During the last two years, however, some countries recorded an increase in the taxation of families, including the families with children. Countries that have over the past ten years successfully sought to support the families with children relied on progressive reliefs or benefits targeted at the families with more than two children.

Keywords: Family benefits, Support of the families with children, Taxes
JEL classification: E24, H24, J32

Published: December 1, 2011  Show citation

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Vítek, L. (2011). Fiscal Instruments of a Support of the Families with Children and their Changes in Developed Countries. European Financial and Accounting Journal, 6(4), 60-84. doi: 10.18267/j.efaj.20
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