Government and public administration

ANALYSIS OF THE IMPACT OF TAX BURDEN AND TAX STRUCTURE ON ECONOMIC GROWTH: FOREIGN EXPERIENCE

Received: 15.05.2018 Published: 15.05.2018

UDC: 336.22:330.35 EDN: VQKJBG DOI: 10.22394/2304-3369-2018-5-79-94

Full text

Abstract

Relevance. Taxation is one of the main levers of government in managing the economy. On the one hand, taxes are the main source of public revenue, on the other, fiscal policy affects the behavior of individual agents and enterprises, and this impact often has a linear rather than a more complicated specification. In this regard, the issue of aggregate impact of tax regime on the rate of economic growth is topical. Tax policy measures influence the economy through a multitude of channels, thus justifying an extremely large coverage of the issues examined in this direction. Tax reforms are one of the main research interests in this direction. This interest is due to the need for expert support experienced by persons responsible for economic policy, if necessary to carry out reforms. The need may be due to a lack of funds for the implementation of political programs or, on the contrary, the desire to improve the well-being of citizens and accelerate economic development reducing tax burden. The long-term effects of mitigating tax burden depend on the principle of financing reform: a symmetric reduction in government spending or a return to high tax rates in future periods. Purpose. This work focuses on the analysis of the tax system and tax policy in various countries, as well as foreign experience of assessing their impact on economic growth rate. Methods, results and their novelty. In particular, we will first generalize foreign experience of analyzing the impact of changes in tax rates on economic growth rates. Than we will outline general conclusions about the impact of tax reforms on growth in different countries, cleared from national and temporal effects. Finally, we will review actual methods of overcoming endogeneity arising when assessing the impact of taxes on economic growth. Practical significance. We think that the results of the research will be of high practical importance in the light of discussion and implementation of tax reforms in Russia, as well as for those responsible for developing economic policies aimed at accelerating growth of the Russian economy.

Keywords

How to cite

Для цитирования:

Казакова М., Лысюк М. Анализ влияния налоговой нагрузки и налоговой структуры на экономический рост: опыт зарубежных стран // Вопросы управления. 2018. Т. 35, № 5. С. 79–94. https://doi.org/10.22394/2304-3369-2018-5-79-94

For citation:

Kazakova M., Lysyuk M. ANALYSIS OF THE IMPACT OF TAX BURDEN AND TAX STRUCTURE ON ECONOMIC GROWTH: FOREIGN EXPERIENCE // Management Issues. 2018. Vol. 35, no. 5. P. 79–94. https://doi.org/10.22394/2304-3369-2018-5-79-94

How to Cite

Kazakova M., Lysyuk M. ANALYSIS OF THE IMPACT OF TAX BURDEN AND TAX STRUCTURE ON ECONOMIC GROWTH: FOREIGN EXPERIENCE // Management Issues. 2018. Vol. 35, no. 5. P. 79–94. https://doi.org/10.22394/2304-3369-2018-5-79-94

References

  1. Gale W. G., Samwick A. A., Center U. B. T. P. Effects of income tax changes on economic growth // The Brookings Institution, 2016. 46 с.
  2. Jaimovich N., Rebelo S. Nonlinear effects of taxation on growth //Journal of Political Economy. 2017. Т. 125. № 1. С. 265-291.
  3. Easterly W., Rebelo S. Fiscal policy and economic growth //Journal of monetary economics. 1993. Т. 32. № 3. С. 417-458.
  4. McMillan J., Naughton B. How to reform a planned economy: lessons from China //Oxford Review of Economic Policy. 1992. Т. 8. № 1. С. 130-143.
  5. Romer P. M. Endogenous technological change //Journal of political Economy. 1990. Т. 98. № 5. Ч. 2. С.71-102.
  6. Lucas Jr R. E. On the size distribution of business firms // The Bell Journal of Economics. 1978. Т. 9. № 2 (Autumn). С. 508-523.
  7. Hall B. H., Jaffe A., Trajtenberg M. Market value and patent citations //RAND Journal of economics. 2005. Т. 36. № 1 (Spring). С. 16-38.
  8. Redner S. How popular is your paper? An empirical study of the citation distribution //The European Physical Journal B-Condensed Matter and Complex Systems. 1998. Т. 4. № 2. С. 131-134.
  9. Grabowski H. G. Patents and New Product Development in the Pharmaceutical and Biotechnology Industry //The Georgetown Public Policy Review, 2003. № 8. С. 7-24.
  10. McBride W. What is the Evidence on Taxes and Growth? // Tax foundation special report. № 207. 10 с.
  11. Huang C. C., Frentz N. What really is the evidence on taxes and growth // Washington, DC: Center on Budget and Policy Priorities, 2014. 12 с.
  12. Gale W. G., Potter S. R. An economic evaluation of the economic growth and tax relief reconciliation act of 2001 // National Tax Journal. 2002. Т. 55. № 1. С. 133-186.
  13. Hungerford, Thomas. 2012. Taxes and the Economy: An Economic Analysis of the Top Tax Rate Since 1945 // Washington, D.C: Congressional Research Service, 2012. 25 с.
  14. Huang C. C. Recent Studies Find Raising Taxes on High-Income Households Would Not Harm the Economy: Policy Should Be Included in Balanced Deficit-Reduction Effort // Washington, DC: Center on Budget and Policy Priorities, 2012. 23 с.
  15. Elmendorf D. W., Reifschneider D. L. Short-run effects of fiscal policy with forward-looking financial markets // National Tax Journal. 2002. Т. 55. Серия 3. С. 357-386.
  16. Auerbach A. J. The Bush tax cut and national saving // National Bureau of Economic Research Working Paper. № 9012, 2002. 43 с.
  17. Diamond J. W., Viard A. D. Welfare and Macroeconomic Effects of Deficit-Financed Tax Cuts: Lessons from CGE Models // James A. Baker III Institute for Public Policy Rice University, 2008. 39 с.
  18. Dennis R. et al. Macroeconomic Analysis of a 10 Percent Cut in Income Tax Rates //Congressional Budget Office Technical Paper Series № 2004-07, 2004. 19 с.
  19. Benzell S. G., Kotlikoff L. J., LaGarda G. Simulating Business Cash Flow Taxation: An Illustration Based on the "Better Way" Corporate Tax Reform // National Bureau of Economic Research Working paper № 23675, 2017. 61 с.
  20. Fehr H. et al. Simulating the elimination of the US corporate income tax // National Bureau of Economic Research Working Paper № 19757, 2013. 43 с.
  21. Попков В.А. Единый налог на вмененный доход как источник формирования местных бюджетов: диссертация на соискание ученой степени кандидата юридических наук. М., 2007. 200 с.
  22. Acosta-Ormaechea S., Sola S., Yoo J. Tax Composition and Growth: A Broad Cross-Country Perspective // IMF Working Papers 12/257, International Monetary Fund, 2012. 36 с.
  23. Barro R. J., Lee J. W. A New Data Set of Educational Attainment in the World, 1950-2010 // National Bureau of Economic Research Working Paper № 15902, 2010. 49 с.
  24. Romer C. D., Romer D. H. The macroeconomic effects of tax changes: estimates based on a new measure of fiscal shocks //American Economic Review. 2010. Т. 100. № 3. С. 763-801.
  25. Blanchard O., Perotti R. An empirical characterization of the dynamic effects of changes in government spending and taxes on output //The Quarterly Journal of Economics. 2002. Т. 117. № 4. С. 1329-1368.
  26. Mertens K., Ravn M. O. The dynamic effects of personal and corporate income tax changes in the United States //American Economic Review. 2013. Т. 103. № 4. С. 1212-47.
  27. Ljungqvist A., Smolyansky M. To cut or not to cut? On the impact of corporate taxes on employment and income // National Bureau of Economic Research Working Paper № 20753, 2014.
  28. Sims C. A. But economics is not an experimental science //Journal of Economic Perspectives. 2010. Т. 24. № 2. С. 59-68.
  29. Asker J., Farre-Mensa J., Ljungqvist A. Corporate investment and stock market listing: a puzzle? //The Review of Financial Studies. 2014. Т. 28. № 2. С. 342-390.
  30. Mukherjee A., Singh M., Žaldokas A. Do corporate taxes hinder innovation? //Journal of Financial Economics. 2017. Т. 124. С. 195-221.