Macroeconomic indicators of determination on tax behaviour of OECD countries

Sokolovskyi, Dmytro (2018): Macroeconomic indicators of determination on tax behaviour of OECD countries.

Abstract

The article deals with investigation of principles, factors and conditions of the government’s tax behavior, notably by means of changing the tax burden. We define a set of potential indicators of the economic efficiency, based on GDP and FDI, nominal and per capita, as well as the ratio of FDI to GDP. By using the statistical analysis techniques we found the statistical dependence between government’s behavior and each of the selected indicators. We argued that the factor GDP per capita has the biggest impact on the government’s tax decisions. Also it showed that the governments mostly act as satisfiers. The obtained results allow to understand the principles of governments’ decision-making, and, therefore, to forecast in some way their behavior in certain economic conditions. Moreover, it could help to understand the reasons why the “race to the bottom” situation appears. The present paper differs from previous studies both by the topic, studying the relations between government’s tax behavior and efficiency of countries economies and by the approach to define this dependence, since the latest can be observed only when each variant of government’s tax reaction is analyzed separately.

• Item Type: MPRA Paper
• Language: English
• Keywords: economic efficiency; tax burden; tax behavior; satisfier; CIT; GDP; FDI; per capita
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E22 - Investment ; Capital ; Intangible Capital ; Capacity; H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H30 - General

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