DOES RAISING TAXES ON THE WEALTHY HURT THE ECONOMY? THE EFFECTS OF TOP MARGINAL INCOME TAX RATES ON GDP GROWTH IN A SAMPLE OF OECD COUNTRIES
This thesis assesses whether marginal income tax rates for top earners have an effect on a country's GDP per capita growth. The paper builds upon previous research on the relationship between tax rates and economic growth by analyzing a sample of 20 OECD countries from 1981 to 2010 using country year fixed effects models. Controlling for other forms of taxation and widely-used growth regressors, the results indicate that top marginal income tax rates have no effect on GDP per capita growth. However, the study does find that corporate taxes have a strong and statistically significant negative effect on growth, while national consumption taxes have a strong and statistically significant positive effect on growth. These findings suggest that policymakers may benefit from seeking alternative approaches to tax policy to maximize a country's economic well-being.
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Shende, Parag (Georgetown University, 2017)One of the most contentious topics in the policy realm is about taxes. This does not only happen at the federal level, but also at the state level. There are several states that do not levy personal income taxes. The goal ...