## Tax Composition and Growth: A Broad Cross-Country Perspective

_IMF Working Papers, October 25, 2012_

## Source details

**Canonical URL:** [Tax Composition and Growth: A Broad Cross-Country Perspective](https://www.imf.org/en/publications/wp/issues/2016/12/31/tax-composition-and-growth-a-broad-cross-country-perspective-40067)

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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

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### 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

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/tax-composition-and-growth-a-broad-cross-country-perspective-40067_