<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The aim of the paper is to identify a potential linear correlation between direct taxes and economic growth. The subject of the paper includes estimating the level and intensity of correlation between direct taxes and economic growth in OECD countries for the period 1996-2016. The study analyses tax forms such as personal income tax, corporate income tax and tax on property, and their potential relationship with economic growth, measured by GDP growth rate. Also, tax revenues growth has been included to determine whether it directly affects the economic growth in observed countries. The results of the group correlation matrix have shown that there is a statistically significant relationship between tax revenues growth, personal income tax, corporate income tax and gross domestic product in OECD countries. However, it is important to note that tax on property and gross domestic product are not significantly correlated at the OECD level, which is logical given the low share of this tax in those countries.</p></abstract>

The aim of the paper is to identify a potential linear correlation between direct taxes and economic growth. The subject of the paper includes estimating the level and intensity of correlation between direct taxes and economic growth in OECD countries for the period 1996-2016. The study analyses tax forms such as personal income tax, corporate income tax and tax on property, and their potential relationship with economic growth, measured by GDP growth rate. Also, tax revenues growth has been included to determine whether it directly affects the economic growth in observed countries. The results of the group correlation matrix have shown that there is a statistically significant relationship between tax revenues growth, personal income tax, corporate income tax and gross domestic product in OECD countries. However, it is important to note that tax on property and gross domestic product are not significantly correlated at the OECD level, which is logical given the low share of this tax in those countries.

The Relationship Between Direct Taxes and Economic Growth in Oecd Countries

Economic Themes

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"The Relationship Between Direct Taxes and Economic Growth in Oecd Countries"}

The aim of the paper is to identify a potential linear correlation between direct taxes and economic growth. The subject of the paper includes estimating the...

The Relationship Between Direct Taxes and Economic Growth in Oecd Countries

Published Online: May 04, 2020

Page range: 273 - 286

Received: Oct 10, 2018

Accepted: Sep 06, 2019

DOI: https://doi.org/10.2478/ethemes-2019-0016

Keywords
direct taxes, economic growth, correlation, OECD countries

© 2019 Jadranka Đurović-Todorović et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

The Relationship Between Direct Taxes and Economic Growth in Oecd Countries

Published Online: May 04, 2020

Page range: 273 - 286

Received: Oct 10, 2018

Accepted: Sep 06, 2019

DOI: https://doi.org/10.2478/ethemes-2019-0016

Keywordsdirect taxes, economic growth, correlation, OECD countries

© 2019 Jadranka Đurović-Todorović et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
direct taxes, economic growth, correlation, OECD countries