Tax Composition and Growth: A Broad Cross-Country Perspective
IMF Working Papers, October 25, 2012
Source details
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- Tax Composition and Growth: A Broad Cross-Country Perspective
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Bibliographic details
- Authors: Santiago Acosta Ormaechea
- Published: October 25, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781616355678.001
Overview
- Research question: relation between changes in tax composition and long-run economic growth.
- Dataset coverage: broad cross-section of countries with different income levels.
- Time span: 1970-2009.
Data and scope
- Number of countries analyzed: 69 countries with at least 20 years of observations on total tax revenue.
- 21 high-income
- 23 middle-income
- 25 low-income
- Dataset claim: described as the most comprehensive and up-to-date dataset on tax composition and growth (as of the study).
Key findings
- General result:
- Increasing income taxes while reducing consumption and property taxes is associated with slower growth over the long run.
- More granular findings:
- Among income taxes, social security contributions and personal income taxes have a stronger negative association with growth than corporate income taxes.
- A shift from income taxes to property taxes has a strong positive association with growth.
- A reduction in income taxes while increasing value added and sales taxes is associated with faster growth.
Subject areas and keywords (as listed)
- Subject: Consumption taxes, Income and capital gains taxes, Income tax systems, Property tax, Revenue administration, Taxes
- Keywords: Caribbean, coefficient estimate, Consumption taxes, control variable, fiscal policy, growth, Income and capital gains taxes, Income tax systems, income-tax share, physical capital, Property tax, regression equation, structure variable, Tax composition, tax revenue, tax structure variable, trade tax, WP