The structure and administration of taxation are frequently omitted from discussion and research. Tax revenue, economic development, economic growth, gross domestic product, human development index, tax policy, economic wellbeing, quality of life. Its flexibility makes it possible for the government to adjust the tax system to suit her desired purpose. Multinationals profit response to tax differentials. Special economic zones open knowledge repository world. Individuals pay the taxes indirectly in the form of higher prices on their purchases.
Tax bases, tax rates and the elasticity of reported income wojciech kopczuk department of economics and sipa, columbia university, 420 west 118th street, rm. Ocgg economy section taxation policy and development. The economics of taxation economic impact of taxes resource allocation when taxes are raised on a product, consumers buy less, manufacturers produce less, and resources will have to go to other industries to be employed behavior adjustment taxes can be used to encourage or discourage certain types of. The study adopts the ordinary least square ols regression technique and established that tax revenue has positive effect on economic growth in nigeria. Learn vocabulary, terms, and more with flashcards, games, and other study tools. The rising contribution of tax to the national budgetwill eventually make the tax system sustainable especially that donor support is steadily declining. Robert lynch found little evidence that state and local taxes are important factors in determining business location decisions or in affecting state economic growth. Because of the increased cost, we generally see a reduction in the quantity of goods and services produced and consumed after the introduction of taxes. Indirect taxes government intervention economics tutor2u. Excise taxes, sometimes called luxury taxes, are used by both state and federal governments.
Archived pdf from the original on 25 december 2017. Nov 14, 2002 lower tax rates mean faster economic growth. The excess burden of taxes is a nonlinear function of tax rates. The economics of taxation guy laroque sciences po 2011 2012 the course will be based on bernard salani es book the economics of taxation, a new edition of which will be available at the end of the year. Profit shifting, multinational firm, corporate income tax, metaanalysis. The economics of taxation second edition bernard salanie the mit press.
Dec 06, 2019 taxes are generally an involuntary fee levied on individuals or corporations that is enforced by a government entity, whether local, regional or national in order to finance government activities. Therefore, the economic developer must make sure that there are sufficient. The economy of poland is the sixth largest in the european union eu and the largest among. The change in components of tax revenue may result in the change in the economic growth and other economic indicators. Taxes and taxation taxmandatory payment to the government o.
Development economics spring 2010 spring 2011 every spring. Eu commission expert group on taxation of the digital economy 2014. Centre for european economic research zew mannheim. Jda, land owners and developer jointly develop a property. Indirect taxes india pdf download economics free study material. The economics of taxation second edition bernard salanie. Others, however, argue that such expenditures lead to higher future taxes, which deters business investment today. All taxes taken together use up about a third of the average americans income.
Case study of oecd countries 1 rudolf macek2 abstract. Effects of taxes on economic behavior dash harvard. The effects which theory suggests the level and composition of taxes can have on. Examples include duties on cigarettes, alcohol and fuel and also vat. Schools of thought the field of macroeconomics is organized into many different schools of thought, with differing views on how the markets and their participants operate. Taxes should be levied according to the taxpayers ability to pay. This study examines the effect of tax revenue on economic growth in nigeria, utilizing time series data for the period spanning from 1970 to 2011. As sezs all derive from the concept of free zones free from tariffs, taxes and. Tax bases, tax rates and the elasticity of reported income. The objective of excise taxation is to place the burden of paying the tax on the consumer. The idea that taxes should be levied by a persons ability to shoulder the binder of taxes. Taxation of corporations and their impact on economic. A retailer selling a product to you has already levied indirect taxes on the product, which is then passed on to the relevant taxcollection authorities.
The oecd model tax convention, a model for countries concluding bilateral tax conventions, plays a crucial role in removing tax related barriers to cross border trade and investment. Examples of items subject to federal excise taxes are heavy tires, fishing equipment, airplane tickets, gasoline, beer and liquor, firearms, and cigarettes. In 2011 the volume of trade exports plus imports with the euro area as share of. No other concept plays such an important and diverse role in. The events in the financial sector during 2011 and. Taxation of corporations and their impact on economic growth. Key tax issues at year end for real estate investors 20182019 pwc. The alternative, pure lumpsum taxes, are attractive from an efficiency. Supporting the development of more effective tax systems oecd. The countries in the hightax group again look markedly di. The aim of this paper is to evaluate the impact of individual types of taxes on the economic growth by utilizing regression analysis on the oecd countries for the period of 2000 2011. It can be derived that the corporate tax policy can affect consumption, investment activity and employment to some extent. The theory is that individuals who earn more money can afford to pay more taxes. Frank albert fetter was the leader in the united states of the early austrian school of economics.
The fiscal stimulus package and the deep recession increased the government budget deficit. Fairness and the arms length principle in a digital economy econstor. An indirect tax is imposed on producers suppliers by the government. Addressing the tax challenges of the digital economy. State and local taxes on businesses corporate income taxes, sales taxes, local property taxes represent only about 1. Especially taxation of corporations has great importance because a corporate tax. Certain goods can be made more price attractive through lower taxes while goods which have high marginal social cost can be made expensive through taxation. The effects of tax revenue on economic growth in nigeria1970. This paper discusses how the effects of taxes on economic behavior are important for revenue estimation, for calculating efficiency effects, and for understanding shortterm macroeconomoic consequences. The share of property taxes and environmentrelated taxes has been fairly constant over time.
Professor of economics, university of exeter, and institute for fiscal studies. As any nonlumpsum tax, corporate income taxation creates distortions in economic choices, reducing its efficiency. Pdf the effects of tax revenue on economic growth in. This occurs when both the country of a patents developer and the country of its final. If there are taxes on other markets, an introduction of a tax on our market do not have to worsen the situation. Tax policy challenges for economic growth and fiscal sustainability. Tax reforms in eu member states 2011 european commission. The economics of taxation guy laroque sciences po 2011 2012 the course will be based on bernard salani es book the economics of taxation, a. Fetter is largely remembered for his views on business monopoly and for a unified and consistent theory of distribution that explained the relationship among capital, interest, and rent. Indirect taxes are a form of government intervention in markets. Jun 04, 2017 we are going to look closely at some of the market interventions to control prices and costs using political mandates while also seeking evidence to tell us. Kaldor, taxation for economic development, journal of mod ern african studies.
Lower tax rates mean faster economic growth cato institute. We want to look at them in terms of their effect on demand, supply and consumerproducer surplus, in this way we can consider the issue of efficiency. However, we will argue that this standard economic. Economic and social development, as a public sector term, is the process by which the. An introduction 8 selected international policy and macroeconmic issues 1 key problems of economic development 2 poverty and inequality. Ambiguity remains in the case of the consumption taxes e. It is the basis for negotiation and application of bilateral tax treaties between countries. Pdf tax structure and economic indicators in the modern. Previous studies found significant effect on the change in.
In case we impose a single tax on the market without taxes, the excess burden increases with the square of the tax rate. Tools to tackle tax evasion and tax fraud report oecd, 2017a as well as the. The economics of taxation offers a thorough discussion of the consequences of taxes on economic decisions and equilibrium outcomes, as well as useful insights into how policy makers should design taxes. An introduction 8 selected international policy and macroeconmic. A synopsis neoclassic theories on economic development new institutional economics nie 1 key problems of economic development hivaids and diseases 95% of all hivs live in dcs. Taxes almost invariably have excess burdens because tax obligations are functions of individual behavior. An appropriate tax system can lead to the optimal resources allocation and to the increase of economic growth. It will be especially useful for a graduate course in public economics, because the analytics are both sophisticated and well explained. The case of eu countries baranova veronika, janickova lenka abstract one of the most debated questions in economy is the relationship between tax rates and economic growth. Supporting the development of more effective tax systems.
Joint venture between a chinese private developer and a belarus. Ocgg economy analysis no 2 3 introduction tax is a central but neglected element of development policy. This note provides a basic framework of public finance at the microeconomic level, starting from a general theory of taxation on commodity, income and corporate profits and then extending issues of tax evasion and compliance, and tax reform. Tstagnation before 1947, the indian economy has grown at a steady clip ever since. Tax collection is not affected by the state of the economy. In terms of adequacy, the contribution of tax revenue to the national budget has increased overtime, rising from 50 percent in 2001 to 70 percent in 2010. Shelf, exclusive economic zone and other maritime zones act, 1976. The economics of taxation is a useful and concise guide to the modern economic theory of taxation. The design of the tax system principles of economics, 8th edition n. A comprehensive survey of the economic literature on the relationship between taxes and economic development by economist dr. International monetary fund, the organisation for economic cooperation and. Government might use direct taxes a a mean to alter the consumption patter of its population.
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