THE BLEND OF TAXES USED TO FUND NATIONAL, STATE, AND LOCAL GOVERNMENTAL BODIES: A FACTOR IN THE ECONOMIES OF THE WORLD? (NATIONAL GOVERNMENT, STATE GOVERNMENT).

摘要

A country's tax structure affects both its economy and the economies of other countries. Each country's actual tax mix must be employed in order to examine the effect of distortions (taxes). Minimal research has focused on the effect of the blend of taxes, but results indicate that a relationship exists between taxes and the economy.; This study examines the relationships of both total tax revenues and tax components in relation to three economic indicators: change in GNP, saving, and investment. These three indicators proxy for the movement of the economy, and the reaction of taxpayers to the tax structure. The types of taxes used are personal and corporate income tax, social security taxes, personal property taxes, consumption taxes, an "other" category, and the deficit/surplus.; Expansion of the field is accomplished in this study by including eighteen industrialized countries in the sample. Also, by using the seemingly-unrelated regression (SUR) technique, the interaction among economic indicators and among countries can be incorporated. Within a country, this technique will partially include the effects of one dependent variable on another. Effects of movements in the economies between countries are incorporated.; The results indicate that the tax structure is highly significant in relation to the economic indicator for each country in this sample. Movement of parameter estimates is found when the SUR technique is applied, indicating that the effects of a shift in the tax structure to place more, or less, dependence on a particular type of tax must be viewed from an overall perspective. Specific results indicate that an increase in consumption taxes will have a positive effect on all phases of the economy, while increased use of a deficit has a negative effect.; The implications of this research for tax policy are very important. Basically, any change in the tax structure should be examined in view of the overall effects found in this study. The change may have detrimental effects that could be addressed either through other tax structure changes or spending changes.