Tax Design in the OECD: A test of the Hines-Summers Hypothesis

Davide Furceri and Georgios Karras

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the effects of economic size and trade openness on tax design in the OECD. Using data for thirty OECD countries over the 1965-2007 period, we test the recently proposed Hines-Summers [2009] Hypothesis, according to which the smaller the size and the greater the openness of the economy, the more it will rely on expenditure taxes and the less on income taxes. Our findings show that the Hines-Summers Hypothesis can claim broad, statistically significant, and robust empirical support in the OECD data sets we examined.

Keywords: Income tax; Consumption tax; Country size; Trade openness (search for similar items in EconPapers)
JEL-codes: E60 H20 (search for similar items in EconPapers)
Date: 2010-06
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
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Related works:
Journal Article: Tax Design in the OECD: A Test of the Hines-Summers Hypothesis (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:23358

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