A Comparative Analysis of the Structure of Tax Systems in Industrial Countries

Assaf Razin, Enrique Mendoza and Linda Tesa

No 1993/014, IMF Working Papers from International Monetary Fund

Abstract: A methodology for computing effective average tax rates on factor incomes and consumption using OECD data from national accounts and revenue statistics is described and applied to construct time series of tax rates for the group of seven largest industrialized countries. These tax rates are compared with estimates of effective marginal tax rates obtained in other studies. The stylized facts that distinguish tax systems across countries are documented, and the co-movements between the tax rates and savings, investment, net exports, unemployment, and hours worked are also examined. The results of this analysis illustrate some of the potential implications of tax policies currently under consideration and suggest that the proposed tax rates are useful approximations to those faced by representative agents in dynamic macroeconomic models.

Keywords: WP; tax rate; income tax; time series; rate of return; trade balance; revenue data; personal income tax rate; capital tax rate; statutory tax; labor income; factor income; physical capital; tax income; Labor income tax tax rate; statutory tax rates; Personal income tax; Capital income tax; Consumption taxes; Average effective tax rate; Income tax systems; North America (search for similar items in EconPapers)
Pages: 62
Date: 1993-02-01
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Citations: View citations in EconPapers (3)

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