Tax Design in the OECD: A Test of the Hines-Summers Hypothesis

9 Pages Posted: 21 Mar 2011  

Davide Furceri

University of Palermo; Organization for Economic Co-Operation and Development (OECD)

Georgios Karras

University of Illinois at Chicago - Department of Economics

Date Written: 2011

Abstract

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 [2009] 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.

Suggested Citation

Furceri, Davide and Karras, Georgios, Tax Design in the OECD: A Test of the Hines-Summers Hypothesis (2011). Eastern Economic Journal, Vol. 37, Issue 2, pp. 239-247, 2011. Available at SSRN: https://ssrn.com/abstract=1789484 or http://dx.doi.org/10.1057/eej.2010.44

Davide Furceri

University of Palermo ( email )

Viale delle Scienza
Palermo, Buenos Aires 90128
Italy

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

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Georgios Karras

University of Illinois at Chicago - Department of Economics ( email )

725 University Hall (UH)
Chicago, IL 60607-7121
United States
312-996-2683 (Phone)
312-996-3344 (Fax)

HOME PAGE: http://www.uic.edu/~gkarras/

Paper statistics

Downloads
2
Abstract Views
237