The Relationship Between Direct Taxes and Economic Growth in Oecd Countries

Đurović-Todorović Jadranka (), Milenković Ivan () and Kalaš Branimir ()
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Đurović-Todorović Jadranka: University of Niš, Faculty of Economics, Republic of Serbia
Milenković Ivan: University of Novi Sad, Faculty of Economics Subotica, Republic of Serbia
Kalaš Branimir: University of Novi Sad, Faculty of Economics Subotica, Republic of Serbia

Economic Themes, 2019, vol. 57, issue 3, 273-286

Abstract: The aim of the paper is to identify a potential linear correlation between direct taxes and economic growth. The subject of the paper includes estimating the level and intensity of correlation between direct taxes and economic growth in OECD countries for the period 1996-2016. The study analyses tax forms such as personal income tax, corporate income tax and tax on property, and their potential relationship with economic growth, measured by GDP growth rate. Also, tax revenues growth has been included to determine whether it directly affects the economic growth in observed countries. The results of the group correlation matrix have shown that there is a statistically significant relationship between tax revenues growth, personal income tax, corporate income tax and gross domestic product in OECD countries. However, it is important to note that tax on property and gross domestic product are not significantly correlated at the OECD level, which is logical given the low share of this tax in those countries.

Keywords: direct taxes; economic growth; correlation; OECD countries (search for similar items in EconPapers)
JEL-codes: E62 H20 H21 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecothe:v:57:y:2019:i:3:p:273-286:n:2

DOI: 10.2478/ethemes-2019-0016

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