The changes in income tax as a tool for solving the fiscal inbalance in the conditions of the Slovak republic

Abstract

The state budget reflects the financial coverage of public expenditures and services and represents the balance of revenues and expenditures of given government. There are two approaches to the understanding of the revenues and expenditures. The first, classic approach, sees the expenditures from quantitative point of view, where the crucial importance is on total amount of expenditures and the incomes are secondary. The modern approach sees the expenditures from qualitative point of view, emphasizes the structure of expenditures and the incomes are of the first priority. The goal of economical policy of each state is to support the economic growth of the country, living standard of population and to improve the quality of business environment. Essential condition of achieving these goals is the income of public budget in the form of taxes, which serve to finance the public goods. On the other hand, the tax and duties burden represents the financial harm to the households and businesses in the country and influences their behavior and decision making process. Key words: active incomes, nontaxable part of tax base, flat expenditures, tax free incomes.