The growth effects of tax rates in the OECD
This paper explores the merits of macro- and micro-based tax rate measures within an open economy ‘fiscal policy and growth’ model. Using annual data for 15 OECD countries we find statistically small, non-robust long-run growth effects of macro-based average tax rates on capital income and consumpti...
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| Format: | Article |
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Wiley
2014
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| Online Access: | https://eprints.nottingham.ac.uk/29432/ |
| _version_ | 1848793784636145664 |
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| author | Gemmell, Norman Kneller, Richard Sanz, Ismael |
| author_facet | Gemmell, Norman Kneller, Richard Sanz, Ismael |
| author_sort | Gemmell, Norman |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | This paper explores the merits of macro- and micro-based tax rate measures within an open economy ‘fiscal policy and growth’ model. Using annual data for 15 OECD countries we find statistically small, non-robust long-run growth effects of macro-based average tax rates on capital income and consumption, but some evidence for average labor income tax effects. Changes in ‘micro’ marginal income tax rates at both the personal and corporate levels yield statistically robust GDP responses of modest size. Both domestic and foreign corporate taxes appear relevant. In general, tax effects on GDP operate largely via factor productivity rather than factor accumulation. |
| first_indexed | 2025-11-14T19:05:48Z |
| format | Article |
| id | nottingham-29432 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T19:05:48Z |
| publishDate | 2014 |
| publisher | Wiley |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-294322020-05-04T16:45:35Z https://eprints.nottingham.ac.uk/29432/ The growth effects of tax rates in the OECD Gemmell, Norman Kneller, Richard Sanz, Ismael This paper explores the merits of macro- and micro-based tax rate measures within an open economy ‘fiscal policy and growth’ model. Using annual data for 15 OECD countries we find statistically small, non-robust long-run growth effects of macro-based average tax rates on capital income and consumption, but some evidence for average labor income tax effects. Changes in ‘micro’ marginal income tax rates at both the personal and corporate levels yield statistically robust GDP responses of modest size. Both domestic and foreign corporate taxes appear relevant. In general, tax effects on GDP operate largely via factor productivity rather than factor accumulation. Wiley 2014-03-03 Article PeerReviewed Gemmell, Norman, Kneller, Richard and Sanz, Ismael (2014) The growth effects of tax rates in the OECD. Canadian Journal of Economics, 47 (4). pp. 1217-1255. ISSN 1540-5982 Marginal tax rates Average tax rates Personal tax Corporate tax GDP growth http://onlinelibrary.wiley.com/doi/10.1111/caje.12105/abstract doi:10.1111/caje.12105 doi:10.1111/caje.12105 |
| spellingShingle | Marginal tax rates Average tax rates Personal tax Corporate tax GDP growth Gemmell, Norman Kneller, Richard Sanz, Ismael The growth effects of tax rates in the OECD |
| title | The growth effects of tax rates in the OECD |
| title_full | The growth effects of tax rates in the OECD |
| title_fullStr | The growth effects of tax rates in the OECD |
| title_full_unstemmed | The growth effects of tax rates in the OECD |
| title_short | The growth effects of tax rates in the OECD |
| title_sort | growth effects of tax rates in the oecd |
| topic | Marginal tax rates Average tax rates Personal tax Corporate tax GDP growth |
| url | https://eprints.nottingham.ac.uk/29432/ https://eprints.nottingham.ac.uk/29432/ https://eprints.nottingham.ac.uk/29432/ |