An examination of income redistribution in Hungary and single-rate tax reform, using a micro-simulation model

The authors of the study analyse income redistribution in Hungary with a new tool: the taxation and support micro-simulation model. There are diverse factors acting in several directions embodied in the 2006 Hungarian tax and support system. Tax concessions make up a sizeable sum, but they fail to reach the truly needy, tending instead to benefit the middle-income strata. Welfare and family supports, on the other hand, go mainly to the poorest third of households and raise their disposable income to a great extent. The system shows high efficiency in reaching families with children and the import of the supports rises according to the number of children.