Taxation and economic sustainability
Macroeconomic theory says that taxes play a repressing role in the economy. Introduction of new forms of taxation, the increase of tax rates and augmentation of tax income of the Government puts a downturn risk on consumption and therefore on economic growth. Knowing that, Governments start to compete with other countries by lowering corporate tax rates and trying to boost economic growth by using foreign investments. On the other hand Governments are pushed to lower personal tax rates in order to satisfy their electorate. It was highly believed that countries with lower tax rates have better prospects for future growth. However, small tax income boundaries government spending and might cause serious imbalances in economy. As the Irish example shows smaller taxes cannot guarantee sustainable growth of the economy. So the taxation and economic development relationship needs rethinking. This paper aims to test the efficiency of taxation in sustainable economic development terms and to discuss the factors that are the most important. The comparative analysis of EU countries is used for the research.
|Date of creation:||30 May 2011|
|Date of revision:|
|Contact details of provider:|| Postal: Universidade Portucalense – Economics and Management Department (CIGE – Centro de Investigação em Gestão e Economia), Rua Dr. António Bernardino de Almeida, 541-619, 4200 – 072 Porto, Portugal|
Web page: http://www.uportu.pt/site-scripts/centro_pagina.asp?codmenu=71&codcentro=24
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hildergart Ahumada & Lorena Garegnani, 1999. "Hodrik – Prescott filter in practice," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0(4), pages 61-76.
- Roger H. Gordon & Julie Berry Cullen, 2002. "Taxes and Entrepreneurial Activity: Theory and Evidence for the U.S," NBER Working Papers 9015, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:ris:cigewp:2011_016. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Luis Pacheco)
If references are entirely missing, you can add them using this form.