Tax Policy for Economic Recovery and Growth

22 Pages Posted: 2 Feb 2011

See all articles by Jens Matthias Arnold

Jens Matthias Arnold

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO)

Bert Brys

Organization for Economic Co-Operation and Development (OECD) - Centre for Tax Policy and Administration (CTP)

Christopher Heady

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO)

Asa Johansson

affiliation not provided to SSRN

Cyrille Schwellnus

Organization for Economic Co-Operation and Development (OECD)

Laura Vartia

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO)

Date Written: February 1, 2011

Abstract

This article identifies tax policy that both speeds recovery from the current economic crisis and contributes to long-run growth. This is a challenge because short-term recovery requires increases in demand while long-term growth requires increases in supply. As short-term tax concessions can be hard to reverse, this implies that policies to alleviate the crisis could compromise long-run growth. The analysis makes use of recent evidence on the impact of tax structure on economic growth to identify which growth-enhancing tax changes can also aid recovery, taking account of the need to protect those on low incomes.

Suggested Citation

Arnold, Jens Matthias and Brys, Bert and Heady, Christopher and Johansson, Asa and Schwellnus, Cyrille and Vartia, Laura, Tax Policy for Economic Recovery and Growth (February 1, 2011). The Economic Journal, Vol. 121, Issue 550, pp. F59-F80, 2011, Available at SSRN: https://ssrn.com/abstract=1753493 or http://dx.doi.org/10.1111/j.1468-0297.2010.02415.x

Jens Matthias Arnold

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Bert Brys

Organization for Economic Co-Operation and Development (OECD) - Centre for Tax Policy and Administration (CTP)

Paris
France

Christopher Heady

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO) ( email )

2 rue Andre Pascal
Paris Cedex 16, MO 63108
France

Asa Johansson

affiliation not provided to SSRN

No Address Available

Cyrille Schwellnus

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Laura Vartia

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO) ( email )

2 rue Andre Pascal
Paris Cedex 16, MO 63108
France

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