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Analysis of dependencies between state tax behavior and macroeconomic indicators

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  • Sokolovskyi, Dmytro

Abstract

Article examines the potential impact of macroeconomic parameters on tax behavior of governments, which can be regarded as integral part of more common problem of state’s economic behavior in tax policy area. We aimed to analyze and to reveal the interaction between base and derivative macroeconomic parameters, characterizing countries’ economic development and level of corporate taxation in order to conclude about effectiveness of state tax policy as well as about ways of its improving. Subject of study is the possible dependence of tax behavior of government institutions from macroeconomic indicators. In the framework of given study we used econometric methods. We made an analysis of eventual interdependence between value of corporate tax burden and certain macroeconomic indicators, representing evaluations of national economic systems: power, wealth, investment attractiveness and congenial investment climate. We revealed that corporate tax rate is used by governments not too actively, while the state tax behavior somewhere can be estimated as ineffective. Taking into account this fact as well as analysis of reasons causing such government behavior can facilitate the optimization of managerial decisions in the area of tax regulation. Also obtained results help to reveal instruments and motivation of economic agents’ behavior on macro-level. They can serve as base for further research concerning principles of behavior in economics in general as well as for examining more narrow areas such as “race to the bottom” problem.

Suggested Citation

  • Sokolovskyi, Dmytro, 2018. "Analysis of dependencies between state tax behavior and macroeconomic indicators," MPRA Paper 86417, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:86417
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    File URL: https://mpra.ub.uni-muenchen.de/86417/1/MPRA_paper_86417.pdf
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    More about this item

    Keywords

    economic behavior; corporate tax rate; tax regulation; macroeconomic indicators;

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • E03 - Macroeconomics and Monetary Economics - - General - - - Behavioral Macroeconomics
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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