Direct versus Indirect Taxation: Trends, Theory and Economic Significance

Jorge Martinez-Vazquez (), Violeta Vulovic () and Yongzheng Liu

International Center for Public Policy Working Paper Series, at AYSPS, GSU from International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University

Abstract: One of the oldest questions in the theory and practice of taxation is that of the appropriate mix of direct and indirect taxes. The choice between direct and indirect taxes has contributed to a long animated debate, in political and academic circles, regarding the virtues and defects of those two forms of taxation. In this paper we provide an overview of the evolution of the ratio of direct taxes to indirect taxes across countries over the past three decades, the theorizing that has gone behind the alleged superiority of one form of taxation or the other, the determinants that appear to be behind the intensity with which both forms of taxation are used, and the economic relevance of the choice of tax structure in terms of economic growth, macroeconomic stability, the distribution of income, and the flow of foreign direct investment (FDI).

Keywords: Direct Taxation; Indirect Taxation; Taxation; Foreign direct investment (FDI). (search for similar items in EconPapers)
Pages: 57 pages
Date: 2009-08-01
New Economics Papers: this item is included in nep-pbe and nep-pub
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Citations: View citations in EconPapers (7)

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http://icepp.gsu.edu/files/2015/03/ispwp0911.pdf (application/pdf)

Related works:
Chapter: Direct versus Indirect Taxation: Trends, Theory, and Economic Significance (2011)
Working Paper: Direct versus Indirect Taxation: Trends, Theory and Economic Significance (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ays:ispwps:paper0911

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