Taxation and the Household Saving Rate: Evidence from OECD Countries

March 1, 1998

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper analyzes anew the relationship between taxation and the household saving rate. On the basis of standard savings and tax revenue data from, it provides compelling and robust empirical evidence of a powerful impact of taxes on household savings. In particular, income taxes are shown to affect negatively the household saving rate much more than consumption taxes.

Subject: Consumption taxes, Income and capital gains taxes, Income tax systems, Revenue administration, Social security contributions, Taxes

Keywords: consumption, consumption tax coefficient, Consumption taxes, GDP, GDP ratio, household savings, Income and capital gains taxes, income elasticity, Income tax systems, Social security contributions, tax, tax revenue, tax variable, WP

Pages:
16
Volume:
1998
DOI:
https://doi.org/10.5089/9781451845426.001
Issue:
036
Series:
Working Paper No. 1998/036
Stock No:
WPIEA0361998
ISBN:
9781451845426
ISSN:
1018-5941

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