Public Choice

, Volume 107, Issue 3–4, pp 199–219 | Cite as

Tax Structure and Growth: Are Some Taxes Better Than Others?

  • Frida Widmalm


Using pooled cross-sectional data from 23 OECD countries, between1965 and 1990, I find evidence that the tax structure affectseconomic growth. Specifically, the proportion of tax revenueraised by taxing personal income has a negative correlation witheconomic growth. This result is robust to a rigorous sensitivityanalysis, where I control for other plausible growth determinantsin a systematic manner. Also, there is some empirical evidencethat tax progressivity, measured in terms of the long-run incomeelasticity of tax revenue, is associated with low economicgrowth.


Negative Correlation Public Finance OECD Country Personal Income 
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Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Frida Widmalm
    • 1
  1. 1.Department of EconomicsUppsala UniversityUppsalaSweden

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