Page 5 - IDEA Studie 4 2022 Dopady zruseni superhrube mzdy

SPOČÍTALI JSME ZA VÁS: DOPADY ZRUŠENÍ SUPERHRUBÉ MZDY, SNÍŽENÍ ODVODŮ NA SOCIÁLNÍ POJIŠTĚNÍ A ZAVEDENÍ DAŇOVÝCH PRÁZDNIN IDEA 2022 Study 4 / 2022 We’ve done the math: Here’s what the abolition of super-gross wages, reductions in social security contributions and the introduction of tax holidays will really mean2 JANUARY 2022 KLÁRA KALÍŠKOVÁ, MICHAL ŠOLTÉS Summary • In the past year, the Czech Republic has seen plenty of changes in how employment income is taxed. Tax legislation adopted in December 2020 and July 2021 will reduce public revenues in 2022 by about 116 billion CZK. In other words, in 2022 employees will pay less than half the income tax that they would have paid without these tax changes. • Average tax rates have been reduced for all income groups, although low-income employees will gain a disproportionately small slice of this savings pie. Employees in the lowest income quintile will save 500 CZK per month on average, whereas those in the highest income quintile will save an average of 4,000 CZK each month. • The newly adopted tax legislation has substantially increased the share of employees who pay zero or negative income tax (i.e. receive what is known as the child tax bonus). There is thus little room for any further income tax reduction, especially for taxpayers who claim tax relief for their children or low-earning spouse. 2 The study was created within the project ”Mapping the effects of the economic crisis and optimizing the systems of taxes, benefits, executions and insolvencies to mitigate its adverse effects‟ (No. TL04000332), which was co-financed by the Technology Agency of the Czech Republic. This study represents the author’s own views and not the official position of the Czech Academy of Sciences’ Economics Institute nor the Charles University Centre for Economic Research and Graduate Education (CERGE). The authors would like to thank Daniel Münich and Daniel Prokop for their valuable comments and advice. Any remaining errors are tthe authors’ own. The study was produced also with support from the Czech Academy of Sciences as part of the Strategy AV21 program Society in Motion and Public Policies. 3