Tax Design in the OECD: A Test of the Hines-Summers Hypothesis
Organization for Economic Co-Operation and Development (OECD); University of Palermo - Istituto di Economia Politica
University of Illinois at Chicago - Department of Economics
Eastern Economic Journal, Vol. 37, Issue 2, pp. 239-247, 2011
This paper investigates the effects of economic size and trade openness on tax design in the OECD. Using data for 30 OECD countries over the 1965–2007 period, we test the recently proposed Hines-Summers  Hypothesis, according to which the smaller the size and the greater the openness of the economy, the more it will rely on expenditure taxes and the less on income taxes. Our findings show that the Hines-Summers Hypothesis can claim broad, statistically significant, and robust empirical support in the OECD data sets we examined.
Number of Pages in PDF File: 9
Date posted: March 21, 2011
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