Page 6 - IDEA Studie 14 Zdaneni vysokoprijmovych osob

in total income. The taxation of top incomes is one of the lowest in international
comparisons, both in absolute levels and taxation of average incomes.
 Using realistically selected input parameter values, the optimal marginal tax rates
imposed on the highest incomes range between 33–43%.
 Given a number of non-systemic changes in the past, it is desirable to consolidate
changes in the taxation of top incomes. We propose a reform that would significantly
simplify the taxation of top incomes and make it more transparent. The tax bases for
health and social insurance for employees and self-employed persons would be
consolidated, introducing a single ceiling on health and social insurance at the level
of four times the average gross salary, while gross income exceeding this ceiling would
be taxed at the top income tax rate of 40%.
 In consequence, the proposed reform brings the taxation system closer to a “flat tax”
than any legislation which has been in effect in the Czech Republic since 1989.

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