Tax Policy Reform and Economic Growth
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Tax Policy Reform and Economic Growth

In the wake of the recent financial and economic crisis, many OECD countries face the challenge of restoring public finances while still supporting growth. This report investigates how tax structures can best be designed to support GDP per capita growth.  

The analysis suggests a tax and economic growth ranking order according to which corporate taxes are the most harmful type of tax for economic growth, followed by personal income taxes and then consumption taxes, with recurrent taxes on immovable property being the least harmful tax. Growth-oriented tax reform measures include tax base broadening and a reduction in the top marginal personal income tax rates. Some degree of support for R&D through the tax system may help to increase private spending on innovation. 

But implementing pro-growth tax reforms may not be easy. This report identifies those public and political economy tax reform strategies that will allow policy makers to reconcile differing tax policy objectives and overcome obstacles to reform. It stresses that with clear vision, strong leadership and solid tax policy analysis, growth-oriented tax reform can indeed be realised.

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    http://oecd.metastore.ingenta.com/content/2310131e.pdf
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Publication Date :
03 Nov 2010
DOI :
10.1787/9789264091085-en
 
Chapter
 

Strategies for Successfully Implementing Growth-oriented Tax Reforms You do not have access to this content

Click to Access: 
    http://oecd.metastore.ingenta.com/content/2310131ec006.pdf
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  • http://www.keepeek.com/Digital-Asset-Management/oecd/taxation/tax-policy-reform-and-economic-growth/strategies-for-successfully-implementing-growth-oriented-tax-reforms_9789264091085-6-en
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Author(s):
OECD
Pages :
63–80
DOI :
10.1787/9789264091085-6-en

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Policy makers can follow certain strategies to make growth-oriented tax reform happen. These strategies help them overcome or circumvent obstacles to tax reform and allow policy makers to reconcile the different efficiency, fairness and wider tax policy objectives. Even though these strategies do not offer a menu that automatically can be applied to all possible tax reforms in OECD countries, the analysis that follows will offer insights that policy makers may find useful in facing the challenging task of implementing growthoriented tax reforms.