Analysis of dependence of tax behavior on macroeconomic factors: the case of OECD countries

Olena Sokolovska and Dmytro Sokolovskyi ()

MPRA Paper from University Library of Munich, Germany

Abstract: The article deals with investigation of principles, factors and conditions of the government’s tax behavior, notably by means of changing the tax burden. We define da set of potential indicators of the economic efficiency, based on the GDP and normalized in various ways on the level of consumer prices in the country, on per capita data and on per hour worked. By using the statistical analysis techniques we found the statistical dependence between government’s behavior and each of the selected indicators. We argued that the factor of labour of productivity per capita has the biggest impact on the government’s tax decisions. Also we showed that the governments mostly act as satisfiers. The obtained results allow to understand the principles of governments’ decision-making, and, therefore, to forecast in some way their behavior in certain economic conditions. Moreover, it could help to understand the reasons why the “race to the bottom” situation appears. The present paper differs from previous studies both by the topic, studying the relations between government’s tax behavior and economic efficiency of their jurisdictions and by the approach to define this dependence, since the latest can be observed only when each variant of government’s tax reaction is analyzed separately.

Keywords: economic efficiency; corporate tax burden; tax compliance; satisfying behavior; GDP; labour productivity (search for similar items in EconPapers)
JEL-codes: C12 E22 H30 J38 (search for similar items in EconPapers)
Date: 2015-09, Revised 2016-01
New Economics Papers: this item is included in nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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