The measurement of 'fiscal burden' on GDP instead than on national net value added produced: a chapter in fiscal illusion
The work calls attention to a major macroeconomic fiscal illusion: that arising from the current official practice of expressing the main fiscal indicators, and particularly the tax burden, as a percentage of GDP rather than NDPF (Net Domestic Product at Factor Costs). This methodology causes a systematic undervaluation of the tax burden, by something between 25% (Sweden and Austria) and 15% (Switzerland). Correctly measured, the tax burden in most European countries is above 50% and in the Nordic countries above 65%, or close to it! Thus, tax payers are deceived about the true cost and size of the public economy. GDPâ€™s origin and widespread adoption is examined as well as the development of the notion of national income adopted to assess the tax burden.
Volume (Year): 50 (1997)
Issue (Month): 202 ()
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