Symptoms of populism in Polish tax policy

Abstract

Theoretical background: In tax matters, the motives of populism can vary. Tax populism should be related to the concept of optimal tax policy, which is forged in a contractual agreement between the state and society. The optimal policy is at odds with demagogy practiced by populists and an overly complicated tax system. The tax policy uses tax parameters, so tax functions and principles can be used to assess it. The Polish tax system and the policy based on it are not consistent with the idea of social contract in relation to the taxes imposed.

Purpose of the article: Given the wide range of tax issues, tax populism has been chosen for further examination. The aim of the article is to assess Poland’s tax policy in terms of tax populism and the essential tax principles that should be taken into account when shaping it: universality, justice, equality, efficiency, simplicity and transparency.

Research methods: To achieve the aim, the following research methods were used in the article: literature studies, critical examination of legal acts, analysis of reports, internet sources and data from the Central Statistical Office in Poland and the Eurostat. The adopted time perspective is 1990–2023. Main findings: The analysis of Poland’s tax policy, which considers the underlying tax principles, shows that in the period in question decisions were made in clear violation of these principles. A striking example of this was the introduction of new ones or changes made during the budget (tax) year. As a result, the principle of certainty was violated and a number of illusions were created by the state. They involved, for example, an alleged reduction of tax burdens: instead of reduced tax rates, new burdens appeared, and taxpayers with higher incomes took advantage of tax reductions, which contributed to the stratification of income. The tax policy fails to adequately address the relationship between tax changes and the state’s spending needs. Severing the link between the income and spending side is particularly dangerous in the face of spending populism. This may lead to another tax illusion, i.e. financing expenditure on social transfers and others with debt, i.e. tax increases in the future.