Tax Design for Inclusive Economic Growth

Brys, Bert; Perret, Sarah; Thomas, Alastair; O’Reilly, Pierce

doi:10.1787/5jlv74ggk0g7-en

Cited by 28 publications

(32 citation statements)

References 43 publications

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“…They are also used to promote equity and to address social and environmental concerns (see Brys et al 2016 for an overview). In many countries a favourable tax treatment exists to promote investment in certain assets such as housing and R&D. Taxes influence households' decision to save, supply labour and invest in education and housing, the decisions of firms to produce, create jobs, invest and innovate, as well as the choice of savings channels and assets by investors.…”

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confidence: 99%

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Public Finance, Economic Growth and Inequality

Johansson¹

2016

OECD Economics Department Working Papers

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JT03405922Complete document available on OLIS in its original format This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. ECO/WKP(2016)70 Unclassified English -Or. English ECO/WKP(2016)70 2 OECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s).Working Papers describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on which the OECD works.Comments on Working Papers are welcomed, and may be sent to OECD Economics Department, 2 rue André Pascal, 75775 Paris Cedex 16, France, or by e-mail to eco.contact@oecd.org. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.Latvia was not an OECD Member at the time of preparation of this publication. Accordingly, Latvia does not appear in the list of OECD Members and is not included in the zone aggregates. © OECD (2016)You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given. All requests for commercial use and translation rights should be submitted to rights@oecd.org ECO/WKP(2016)70 3 ABSTRACT/RÉSUMÉPublic finance, economic growth and inequality: A survey of the evidence This paper reviews the key issues concerning the impact of public spending and taxation on long-run growth and inequality and takes stock of existing theoretical and empirical studies. Overall, the evidence highlights that the size of the government matters for long-term growth as a too large government may undermine growth through the cost of financing public spending. A reallocation of public spending towards infrastructure and education would raise income in the long run, whereas increasing social welfare spending can reduce inequality as such spending increases redistribution and risk sharing. Similarly, the available evidence also supports the hypothesis that some taxes are more distortionary than others, with income taxes found to be more harmful for growth than consumption and property taxes. However, a tax shift from income towards consumption taxes has equity implications, since income taxes are general...

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“…dual or semi-dual income tax systems). This change in the taxation of capital income was in most cases not accompanied by a broadening of the capital income base (Brys et al, 2016). At the same time, corporate income tax rates have declined and special tax incentives exist in many countries (e.g.…”

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Public Finance, Economic Growth and Inequality

Johansson¹

2016

OECD Economics Department Working Papers

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“…57 Brys et al (2016). 58 The effect of the corporate income tax-to-GDP ratio is not statistically significant, which is not surprising in view of the measured redistribution.…”

Section: The Tax Structurementioning

confidence: 92%

“…52 Previous OECD work (Brys et al, 2016) call for progressive rates to be applied to personal capital income: in this respect, countries are encouraged to consider introducing "dual progressive income tax" systems which would tax capital income under a separate rate schedule at progressive rates. The rate schedule could exempt or tax at low rates total household capital income below a minimum threshold.…”

Section: A Focus On Top Personal Income Tax Rates and The Taxation Ofmentioning

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OECD Economics Department Working Papers

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Local Government Tax Structure

Trasberg

Raffer

Moisio³

2021

Local Public Finance

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Designing the system of local funding implies the allocation of different tax sources to local governments. This challenge is of particular interest in times of economic recession since tax revenues can stabilise local revenues and therefore limit the need of fiscal regulation. International organisations promote a shift from labour taxes towards less growth-deteriorating consumption taxes. The recommendations for local governments aim at an increase of property taxation, which yields rather stable revenues over the business cycle. At first glance, this advice seems to describe a path of optimisation, minimising adverse economic effects and providing local governments with more reliable revenues. From this starting point, we analyse local tax structures across Europe with Eurostat data from 2004 to 2018. This study reveals that in times of economic slowdown, the share of potentially more growthdeteriorating local income tax revenue increased relative to the share of consumption tax revenue. Moreover, revenue from the current local tax basket is quite dependent on cyclical variations. Both imply that there is room for improving local government tax structures. However, although there are criteria for an optimal local tax structure, revenues should match the set of public services. As local governments provide quite heterogeneous sets, there is no one-size-fits-all solution.

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Tax Design for Inclusive Economic Growth

Cited by 28 publications

References 43 publications

Public Finance, Economic Growth and Inequality

Public Finance, Economic Growth and Inequality

OECD Economics Department Working Papers

Local Government Tax Structure

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