Tax Politics in Eastern Europe by Appel Hilary;

Author:Appel, Hilary;
Language: eng
Format: epub
Publisher: University of Michigan Press

The Slovak Media and Think Tanks

Most civic organizations and interest groups did not pose a barrier to the overhaul of the tax system. On the contrary, Slovak think tanks, the media, and Slovak business tended to lend support to the Mikloš tax reform. As a legacy of the Mečiar period, Slovakia's nongovernmental organizations (NGOs) were generally pro-Western and proreform. In the past, the Slovak NGOs and think tanks played an important role in organizing mass opposition to the Mečiar government and worked to end Slovakia's exclusion from NATO and the EU. In the 1990s, this sector served as the holding space for many talented pro-Western intellectuals and politicians. Mikloš came from the ranks of Slovakia's NGO sector, as did many of his colleagues pursuing economic and social reforms in the Dzurinda government. With government encouragement, the think tanks and NGOs became a support base for, rather than a source of neutral analysis of, the liberal reforms. Scholars of Slovak politics emphasize the relationship between ministers and the groups of experts working in (and funded by) the NGO sector in designing and implementing reform projects.17

Economists in the NGO sector used the major Bratislava newspapers, most notably Sme and Pravda, as publication outlets to express support for reforms. Fisher, Gould, and Haughton (2007) highlight the supportive role played by the mainstream media in supporting Dzurinda's reforms. They describe journalists as “active participants in policy making” and identify particular journalists with former government experience as especially important for the process, like Robert Žitnansky, Miroslav Beblavý, and Vladimír Tvaroška (Fisher, Gould, and Haughton 2007, 992). Mikloš's adviser, Martin Bruncko, had frequent contact with the press, and he acknowledged that the government could easily manipulate and persuade the young journalists. Due to years of media repression under Mečiar's tenure and under communism, the journalism profession in the early 2000s was still in its infancy. Even journalists at the major Slovak newspapers tended to be in their early and mid-twenties. Bruncko found that the young journalists were impressionable and rather quick to accept the logic of the reforms.

Nor did the Slovak business sector prove to be an obstacle to tax reform. According to Mikloš, lobbyists from various industries failed to protect the continuation of favorable loopholes or special exemptions for enterprises. He explained their failure: “We knew we could not make any exceptions for any one company, or else another company would use it to try to get its own exception.”18 As expected, winning the support of industry never posed a significant challenge to the tax reform package since the local business sector would benefit from the lower corporate tax rates and the elimination of the dividend tax. The lifting of the dividend tax as part of the tax reform package was a boon primarily for smaller domestic companies.19 Moreover, business leaders, with their (much) higher than average salaries, were the obvious beneficiaries of the flat tax. After all, the wealthiest Slovaks saw their personal income tax obligations essentially cut in half overnight with the flat-tax program.

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