Work detail

The importance of tax system structure for economic growth in OECD countries - Extreme Bounds Analysis

Author: Mgr. Petr Choutka
Year: 2015 - winter
Leaders: Ing. Irena Kemény
Work type: Economic Theory
Language: English
Pages: 62
Awards and prizes:
Abstract: The thesis examines the importance of tax system structures for economic growth in OECD
countries. It aims to find out whether a revenue-neutral tax reform can promote economic
growth. In other words, its objective is to identify taxes which are most harmful for economic
growth and suggest tax policy implications accordingly. The extreme bounds analysis is
employed to examine the robustness of relationship between particular taxes and the growth
rate. This method consists in running a number of regressions and observing how the
coefficients respond to various model alterations. The results suggest that taxes levied on
personal income have a robust negative impact on economic growth. On the other hand,
consumption and property taxes appear to be non-significant predictors of economic growth.
The policy implication is drawn that a revenue-neutral tax reform shifting the tax burden from
personal income towards consumption and property is likely to boost the economy.




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