The growth effects of tax rates in the OECD

Norman Gemmell, Richard Kneller and Ismael Sanz

Canadian Journal of Economics, 2014, vol. 47, issue 4, 1217-1255

Abstract: This paper explores the merits of macro and microbased tax rate measures within an open economy fiscal policy and growth model. Using annual data for 15 OECD countries we find statistically small, nonrobust longrun growth effects of macrobased average tax rates on capital income and consumption, but some evidence for average labour income tax effects. Changes in micro marginal income tax rates at both the personal and corporate levels yield statistically robust GDP responses of modest size. Both domestic and foreign corporate taxes appear relevant. In general, tax effects on GDP operate largely via factor productivity rather than factor accumulation.

JEL-codes: H24 H30 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (32)

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Journal Article: The growth effects of tax rates in the OECD (2014)
Working Paper: The Growth Effects of Tax Rates in the OECD (2013)
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