Fiscal responses to the economic downturn in Eastern Europe in 2010-11

An economic downturn boosts demand for fiscal rebalancing. It can come either in the form of increased revenues or as spending cuts. Extra revenues can be generated in two major ways: 1) increasing traditional forms of taxes or 2) hitherto unknown, or unorthodox revenue raising, special taxes and levies. Latter was especially dominant in the case of Hungary.
We discuss Hungarian special taxes in three separate groups: 1) the bank levy, 2) the special taxes on retail and energy companies and 3) the telecom taxes. Then we address a new phenomenon, the fat tax. In each cases we attempt to take account of similar measures taken by other governments.

Financial Research Working Papers, November 2011

Keywords? Economic crisis; Fiscal policy; Special taxes; Bank levy; Windfall tax; Fat tax
JEL? E62, H25, H12