Changes in tax centralization as a result of the global crisis

Comparative analysis of Hungary and Austria between 2002 and 2016

Abstract

The global financial crisis that erupted in 2007-2008 had a major impact on the fiscal policies of national economies, resulting in structural and proportional changes in tax centralization. The study looks back at the tax burden in the EU-28 and OECD countries, and then analyzes in detail the changes in the tax centralization of Hungary and Austria and its economic policy rationale. Two conclusions emerge from the comparative analysis. The first is that Austria has used traditional crisis management, while Hungary has restructured and stabilized its tax centralization system using novel fiscal and monetary methods. The other conclusion of the study confirms that the high level of international competitiveness of a national economy
cannot be explained solely by its low level of tax centralization and vice versa.