Abstract

The paper analyses the structure of marginal tax rates. It examines the “brackets” of personal income tax, the dynamics and scope of non-taxable threshold (the so called zero tax bracket) and the last tax bracket which is (usually) associated with the highest (maximum) tax rate. The evolution of marginal tax rates at five selected levels of labor earnings defined as a proportion to the average wage in the country is traced against this background. The study also analyzes the behavior of average tax rates at the five selected levels of earnings for the period 1990 – 2008. Certain conclusions are made about the impact of respective changes (in marginal and average tax rates) on labor supply in the economy. Finally the paper examines the fluctuations in local progressivity of the income tax through time.