The "Growth Tax" in the United States

Gerald W Scully

Public Choice, 1995, vol. 85, issue 1-2, 80 pages

Abstract: By providing public goods, including law and order, national defense, and income redistribution that expands the gains from exchange (the scope and membership of the constitutional agreement), government expenditures act as a positive externality on the growth rate. Beyond that level, taxes act as a negative externality. In this paper, a simple model is formulated and the optimal (growth-maximizing) tax rate found. Empirical estimation finds it to be in the range of 21.5-22.9 percent. The effect of taxation beyond this level is a cumulative loss of about $30 trillion (1972 dollars) in GNP over the period 1949-89. Copyright 1995 by Kluwer Academic Publishers

Date: 1995
References: Add references at CitEc
Citations: View citations in EconPapers (28)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:pubcho:v:85:y:1995:i:1-2:p:71-80

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11127/PS2

Access Statistics for this article

Public Choice is currently edited by WIlliam F. Shughart II

More articles in Public Choice from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().