Tax policy, social inequality and growth

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

The effects of social inequality usually include income inequality. Income inequality is augmented or reduced by tax policies. This paper finds empirical evidence that shifting the tax burden from the socially disadvantaged to the socially advantaged would cause gross domestic product (GDP) to rise. Specifically, this paper uses Reiterative Truncated Projected Least Squares–a regression technique that produces reduced-form estimates while solving the omitted variables’ problem–to estimate dGDP/d(Property Tax), dGDP/d(Corporate Tax), dGDP/d(Individual Tax) and dGDP/d(Sales Tax) for 23 countries using annual data from 1970 to 2012. GDP is measured in millions of US dollars and each tax is tax revenues as a per cent of GDP. For 13 of the 23 countries examined after 2008, we find that property and corporate taxes are the best taxes (increases GDP the most) to increase and individual income taxes and sales taxes are the worse to raise.

Original languageEnglish (US)
Pages (from-to)253-269
Number of pages17
JournalContemporary Social Science
Volume11
Issue number2-3
DOIs
StatePublished - Jul 2 2016

Fingerprint

tax policy
gross domestic product
social inequality
taxes
corporate tax
property tax
sales
tax increase
tax burden
income
tax revenue
income tax
dollar
regression
cause
Tax
Social Inequality
evidence

Keywords

  • estimates
  • growth
  • income distribution
  • social inequality
  • surplus of savings

ASJC Scopus subject areas

  • History
  • Social Sciences(all)

Cite this

Tax policy, social inequality and growth. / Leightner, Jonathan E; Haiqi, Zhang.

In: Contemporary Social Science, Vol. 11, No. 2-3, 02.07.2016, p. 253-269.

Research output: Contribution to journalArticle

Leightner, Jonathan E ; Haiqi, Zhang. / Tax policy, social inequality and growth. In: Contemporary Social Science. 2016 ; Vol. 11, No. 2-3. pp. 253-269.
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