<abstract xmlns="http://www.w3.org/1999/xhtml"><p>In a research paper, the authors provide an empirical approach to taxes and economic growth in the United States in the period 1996-2016. The basic goal is to explore how taxes affect economic growth. The subject of the research is measuring the effects of tax revenue growth and tax form as a personal income tax, corporate income tax and social security contributions on gross domestic product as a proxy for economic growth. Methodology framework includes several tests to clear the potential problem of heteroscedasticity, autocorrelation, multicollinearity and specification of the model. Based on diagnostic tests, a regression model is adequately created where fundamental econometric procedures are applied. Correlation matrix reflects a strong and positive relationship between tax revenue growth and corporate income tax on the one side and gross domestic product growth, on the another side. Also, personal income tax and social security contributions are weakly related to gross domestic product growth. The model shows a significant effect of tax revenue growth and social security contributions, while personal income tax and corporate income tax do not have a significant impact on gross domestic product growth. Interestingly, personal income tax as the main tax form in the tax structure of the United States has no significant impact on economic growth compared to social security contributions which percentage share is lesser.</p></abstract>

In a research paper, the authors provide an empirical approach to taxes and economic growth in the United States in the period 1996-2016. The basic goal is to explore how taxes affect economic growth. The subject of the research is measuring the effects of tax revenue growth and tax form as a personal income tax, corporate income tax and social security contributions on gross domestic product as a proxy for economic growth. Methodology framework includes several tests to clear the potential problem of heteroscedasticity, autocorrelation, multicollinearity and specification of the model. Based on diagnostic tests, a regression model is adequately created where fundamental econometric procedures are applied. Correlation matrix reflects a strong and positive relationship between tax revenue growth and corporate income tax on the one side and gross domestic product growth, on the another side. Also, personal income tax and social security contributions are weakly related to gross domestic product growth. The model shows a significant effect of tax revenue growth and social security contributions, while personal income tax and corporate income tax do not have a significant impact on gross domestic product growth. Interestingly, personal income tax as the main tax form in the tax structure of the United States has no significant impact on economic growth compared to social security contributions which percentage share is lesser.

Estimating the Impact of Taxes on the Economic Growth in the United States

Economic Themes

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

{"article-title":"Estimating the Impact of Taxes on the Economic Growth in the United States"}

In a research paper, the authors provide an empirical approach to taxes and economic growth in the United States in the period 1996-2016. The basic goal is to...

Estimating the Impact of Taxes on the Economic Growth in the United States

Published Online: Jan 24, 2018

Page range: 481 - 499

Received: Aug 05, 2017

Accepted: Oct 20, 2017

DOI: https://doi.org/10.1515/ethemes-2017-0027

Keywords
tax, growth, income, impact, the United States

© 2017 Branimir Kalaš et al., published by De Gruyter Open

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

Estimating the Impact of Taxes on the Economic Growth in the United States

Published Online: Jan 24, 2018

Page range: 481 - 499

Received: Aug 05, 2017

Accepted: Oct 20, 2017

DOI: https://doi.org/10.1515/ethemes-2017-0027

Keywordstax, growth, income, impact, the United States

© 2017 Branimir Kalaš et al., published by De Gruyter Open

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

Keywords
tax, growth, income, impact, the United States