The "Growth Tax" in the United States
AbstractBy providing public goods, including law and order, national defense, and income redistribution that expands the gains from exchange (the scope and membership of the constitutional agreement), government expenditures act as a positive externality on the growth rate. Beyond that level, taxes act as a negative externality. In this paper, a simple model is formulated and the optimal (growth-maximizing) tax rate found. Empirical estimation finds it to be in the range of 21.5-22.9 percent. The effect of taxation beyond this level is a cumulative loss of about $30 trillion (1972 dollars) in GNP over the period 1949-89. Copyright 1995 by Kluwer Academic Publishers
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Bibliographic InfoArticle provided by Springer in its journal Public Choice.
Volume (Year): 85 (1995)
Issue (Month): 1-2 (October)
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Web page: http://www.springerlink.com/link.asp?id=100332
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- Bekzod ABDULLAEV & Laszlo KONYA, 2014. "Growth Maximizing Tax Rate for Uzbekistan," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(1), pages 59-72.
- Meenagh, David & Minford, Patrick & Wang, Jiang, 2007.
"Growth and relative living standards - testing Barriers to Riches on post-war panel data,"
CEPR Discussion Papers
6288, C.E.P.R. Discussion Papers.
- Minford, Patrick & Meenagh, David & Wang, Jiang, 2007. "Growth and relative living standards - testing Barriers to Riches on post-war panel data," Cardiff Economics Working Papers E2007/12, Cardiff University, Cardiff Business School, Economics Section.
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