Reinhard B. Koester|Roger C. Kormendi
TAXATION, AGGREGATE ACTIVITY AND ECONOMIC GROWTH: CROSS?COUNTRY EVIDENCE ON SOME SUPPLY?SIDE HYPOTHESES
University of Michigan–Ann Arbor|University of Michigan–Ann Arbor
data sixtythree countries used examine impact average marginal tax rates level growth economic activity apparent negative effects tax rates growth disappear upon controlling 1 potential endogeneity average tax rates per capita income 2 relation economic growth per capita income however controlling average tax rates increases marginal tax rates negative effects level economic activity evidence supports hypothesis reductions progressivity tax rates induce parallel shift upward growth path