tax growth

Please cite this paper as:

Johansson, Å. et al. (2008), “Taxation and Economic
Growth”, OECD Economics Department Working Papers,
No. 620, OECD Publishing. http://dx.doi.org/10.1787/241216205486 OECD Economics Department
Working Papers No. 620

Taxation and Economic
Growth
Åsa Johansson, Chistopher Heady,
Jens Arnold, Bert Brys, Laura Vartia

JEL Classification: C33, H23, H24, H25, O40, O43

Unclassified

ECO/WKP(2008)28

Organisation de Coopération et de Développement Économiques
Organisation for Economic Co-operation and Development

03-Jul-2008
___________________________________________________________________________________________
English - Or. English
ECONOMICS DEPARTMENT

ECO/WKP(2008)28
Unclassified
TAXATION AND ECONOMIC GROWTH
ECONOMICS DEPARTMENT WORKING PAPER No. 620

By
Åsa Johansson, Christopher Heady, Jens Arnold, Bert Brys and Laura Vartia

All OECD Economics Department Working Papers are available on the OECD internet website at www.oecd.org/eco/working_papers English - Or. English

JT03248671

Document complet disponible sur OLIS dans son format d 'origine
Complete document available on OLIS in its original format

ABSTRACT/RESUMÉ
Taxation and Economic Growth
This paper investigates the design of tax structures to promote economic growth. It suggests a “tax and growth” ranking of taxes, confirming results from earlier literature but providing a more detailed disaggregation of taxes. Corporate taxes are found to be most harmful for growth, followed by personal income taxes, and then consumption taxes. Recurrent taxes on immovable property appear to have the least impact. A revenue neutral growth-oriented tax reform would, therefore, be to shift part of the revenue base from income taxes to less distortive taxes such as recurrent taxes on immovable property or consumption.
The paper breaks new ground by using data on industrial sectors and individual firms to show how redesigning taxation

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