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World Tax Index: New Methodology for OECD Countries, 2000-2010

Author

Listed:
  • Zuzana Machova

    (VSB - Technical University of Ostrava)

  • Igor Kotlan

    (VSB - Technical University of Ostrava)

Abstract

This paper follows our previous article, Kotlán and Machová (2012a), which presented an indicator of the tax burden that can be used as an alternative to the tax quota, or for implicit tax rates in macroeconomic analyses. This alternative is an overall multi-criteria index called the WTI – the World Tax Index. The aim of this paper is to present the new World Tax Index 2013 and its methodology, which allowed us to compute it for all 34 OECD countries for the 2000–2012 period, with special references to methodology changes from the previous version. We show that, using the WTI, the highest tax burden is measured for Denmark, Belgium and Turkey, while the lowest tax burden is in Switzerland, Ireland, Chile or Japan. The total ranking of the countries is from 66% correlated with the ranking according to the tax quota, mainly due to a strong correlation in the case of property taxes, personal income taxes and VAT-type taxes. In these cases, the tax quota seems to be a good approximator of the tax burden. However, there is no correlation between corresponding tax quotas and WTI sub-indices for corporate taxes or selective consumption taxes. In those cases, the tax quota apparently fails and is not suitable for use in further analyses.

Suggested Citation

  • Zuzana Machova & Igor Kotlan, 2013. "World Tax Index: New Methodology for OECD Countries, 2000-2010," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 2, pages 165-179, June.
    • Handle: RePEc:cmn:journl:y:2013:i:2:p:165-179
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    References listed on IDEAS

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    1. Lazar Sebastian, 2010. "Effective Tax Burden Borne By Companies: A Review And A New Methodology," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 584-588, December.
    2. Tomasz Jedrzejowicz & Gabor Kiss & Jana Jirsakova, 2009. "How to measure tax burden in an internationally comparable way?," NBP Working Papers 56, Narodowy Bank Polski.
    3. De Laet, Jean-Pierre & Wöhlbier, Florian, 2008. "Tax burden by economic function A comparison for the EU Member States," MPRA Paper 14761, University Library of Munich, Germany.
    4. Elschner, Christina & Schwager, Robert, 2004. "A Simulation Method to Measure the Tax Burden on Highly Skilled Manpower," ZEW Discussion Papers 04-59, ZEW - Leibniz Centre for European Economic Research.
    5. Irena Szarowská, 2011. "Changes in taxation and their impact on economic growth in the European Union," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 59(2), pages 325-332.
    6. Zoltan Imre Nagy, 2011. "The Economic and Psychological Contexts of the Tax Evasion on Hungary´s Example," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 3, pages 55-68, September.
    7. Igor Kotlan & Zuzana Machova, 2012. "World Tax Index: Methodology and Data," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 2, pages 19-33, June.
    8. Jens Mathias Arnold, 2008. "Do Tax Structures Affect Aggregate Economic Growth?: Empirical Evidence from a Panel of OECD Countries," OECD Economics Department Working Papers 643, OECD Publishing.
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    Cited by:

    1. Zoltán Bartha & Andrea S. Gubik, 2014. "Characteristics Of The Large Corporation-Based, Bureaucratic Model Among Oecd Countries – An Foi Model Analysis," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 1, pages 1-20, March.

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