Non-Linear Effects of Taxation on Growth
Posted: 1 Feb 2013
There are 3 versions of this paper
Non-Linear Effects of Taxation on Growth
FRB Atlanta CQER Working Paper No. 13-02
Number of pages: 49
Posted: 29 Mar 2015
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57
Non-Linear Effects of Taxation on Growth
NBER Working Paper No. w18473
Number of pages: 40
Posted: 20 Oct 2012
Last Revised: 24 Jun 2023
Downloads
42
Date Written: December 2012
Abstract
We study a model in which the effects of taxation on growth are highly non-linear. Marginal increases in tax rates have a small growth impact when tax rates are low or moderate. When tax rates are high, further tax hikes have a large, negative impact on growth performance. We argue that this non-linearity is consistent with the empirical evidence on the effect of taxation and other disincentives to investment and innovation on economic growth.
Keywords: growth, taxes
JEL Classification: H2, O4
Suggested Citation: Suggested Citation
Jaimovich, Nir and Tavares Rebelo, Sergio, Non-Linear Effects of Taxation on Growth (December 2012). CEPR Discussion Paper No. DP9261, Available at SSRN: https://ssrn.com/abstract=2210231
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