Do Taxes Matter for Long-Run Growth? [electronic resource] : Harberger's Superneutrality Conjecture, Asea, Patrick K..

Asea, Patrick K.
Washington, D.C. : International Monetary Fund, 1995.
IMF eLibrary
IMF Working Papers; Working Paper No. 95/79.
IMF Working Papers; Working Paper No. 95/79
Government document
1 online resource (42 p.)
Local subjects:
Average tax rate.
Budget constraint.
Capital accumulation.
Capital stock.
Compensation of employees.
Consumption tax.
Consumption taxes.
Corporation income tax.
Direct taxes.
Effect of taxation.
Effective tax rates.
Effects of tax policy.
Effects of taxation.
Effects of taxes.
Fiscal policy.
Fiscal revenue.
Fiscal variables.
Government expenditure.
Government expenditures.
Government spending.
Higher income.
Higher tax rates.
Income tax cuts.
Income tax rates.
Income taxes.
Indirect tax.
Indirect taxation.
Indirect taxes.
Individual income tax.
Individual income taxes.
International taxation.
Labor taxes.
Local taxes.
Marginal tax rate.
Marginal tax rates.
Optimal tax.
Optimal taxation.
Payroll taxes.
Public expenditures.
Public finance.
Reduction in tax.
Social security taxes.
Tax analysis.
Tax base.
Tax bases.
Tax burden.
Tax change.
Tax changes.
Tax cut.
Tax cuts.
Tax design.
Tax distortions.
Tax exemptions.
Tax harmonization.
Tax incomes.
Tax labor.
Tax measures.
Tax policy.
Tax rate changes.
Tax rates.
Tax rates on capital.
Tax reforms.
Tax return.
Tax returns.
Tax revenue.
Tax revenues.
Tax structure.
Tax structures.
Tax system.
Tax systems.
Tax treatment.
Taxation of capital income.
Taxation of income.
Taxes on capital.
Taxes on growth.
Taxes on income.
Taxes on labor.
Total tax revenue.
Harberger’s superneutrality conjecture contends that, although in theory the mix of direct and indirect taxes affects investment and growth, in practice growth effects of taxation are negligible. This paper provides evidence in support of this view by testing the predictions of endogenous growth models driven by human capital accumulation. The theoretical analysis highlights implications of different taxes for growth and investment in these models. The empirical work is based on cross-country regressions and numerical simulations, using a new methodology for estimating aggregate effective tax rates. Results show significant investment effects from income and consumption taxes that are consistent with small growth effects. The results are robust to the introduction of other growth determinants.
Description based on print version record.
Asea, Patrick K.
Mendoza, Enrique G.
Milesi-Ferretti, Gian-Maria.
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