Tax-Awareness and the Reform of the Welfare State. By László Csontos, János Kornai and István György Tóth. Discussion Paper Series, Cambridge: Harvard Institute of Economic Research, No. 1790; and Budapest: Collegium Budapest, Institute for Advanced Study, No. 37., 1997.

Kornai János: Tax-Awareness and the Reform of the Welfare State. By László Csontos, János Kornai and István György Tóth. Discussion Paper Series, Cambridge: Harvard Institute of Economic Research, No. 1790; and Budapest: Collegium Budapest, Institute for Advanced Study, No. 37., 1997.

1. Introduction Reform of the welfare sector is on the agenda in Hungary, as it is in other post-socialist countries. Debate is taking place on the financing of the pension system, health care and higher education, on transformation of the social insurance system, and on the role of the welfare state. Those advocating a given point of view often claim that the public supports some idea or other, without being able to show on what grounds they base their statements. It is especially important under these circumstances to clarify what citizens know of these matters and what position they take on them. We conducted a survey among the population of Hungary in early 1996,1 in which we sought answers to two groups of questions. We wanted to know how clearly Hungarians perceive the taxes levied on them, Le^, to what extent they are “tax conscious”. Is thenpicture of the link between tax payment and welfare services accurate or distorted? In addition, we wanted information about the public’s preferences over reform alternatives of the welfare system. The investigation centered on a survey using a questionnaire. The sample of 1,000 was confined to the population of active age, of which it was sufficiently representative. The interviewer spent about an hour in conversation with each respondent. One part of the interview was a customary survey by questionnaire. Answers were received about the characteristics of respondents, and how informed and tax conscious they were. The other part of the interview had more resemblance to an experiment. We wanted to know the magnitude of the tax burden respondents are ready to accept, how much income they are ready to relinquish to the state for providing various welfare services. This approach can be The following contributed to the concept for the research: Iván Csaba (CEU), László Csontos (CEU), Endre Gács (MF), Róbert Iván Gál (Collegium Budapest, TÁRKI), Péter Kadeiják (Budapest University of Economics), János Kornai (Collegium Budapest, Harvard University), Erika Révész (TÁRKI), Péter Róbert (TÁRKI), András Semjén (Institute of Economics), József Taijányi (TÁRKI), and István György Tóth (TÁRKI). 1 The idea for the research came from János Kornai, who outlined the main conceptual framework for the survey. The research team was directed by László Csontos. It took place under the auspices of the Social Research Informatics Centre (TÁRKI) at the request of the Hungarian Ministry of Finance (MF), with financial support from the MF and the Central European University (CEU).