留学生税收政策课程论文：不协调的税收结构对经济发展的影响

发布时间：2017-01-11 09:02

这项研究扩展第一项研究由陶菲克和 Imbarine 发现的每个类型基于四个分组级别的收入的税收收入的税收收入不同影响和后果。本文研究了基于不同收入水平的 1960年-2009 年期间的 120 多个国家，在其中使用的面板数据和计量方法。在此研究中，我们试图探索进一步影响税收收入组件与更多的准确的要在其中查找任一税将负担或给积极的角度作为收入，，对于一个国家来说。此外，这项研究是考察其他因素能解释"正相关"税收对经济增长和繁荣，测量由 GDP 人均在开发国家，但"混合的效应"在跨国研究议员 Slemrod  所述。

In order to improve the first study, we are used the robust methodology to correct the standard errors in the model regression. Using the fixed and random effects in the model regression based on the Hausman test and Breusch Pagan LM test, all components of tax revenue are examined in order to relate it with the economic indicators. This study was correct the standard errors by applying robustness of standard errors and maximum likelihood methods. The results shows that tax structures have the significant effects on development of economic, in which changes in each component of taxes are influenced by the tax policy and level of income in a country. This study conclude that tax to GDP ratio has negative impact to growth in the low and lower middle income countries but positive impact in the upper middle and high income countries that relate with the difference in tax policy and prosperity that measured by per capita income in the country.

Keywords: tax revenue; economic indicators; economic growth; fixed and random effects; GDP ratio; per capita income; tax structures; tax policy.

Introduction

The theory of taxes mentioned that the government will reduce the amount of taxes and tax rate such as marginal tax rate and corporate tax rate to generate the economic growth in a county. It means that the tax structures will burden the citizen and give the negative impact to the economic development or growth. However, there is no statistical and econometrics evidence that high taxes will slow down the economic growth for all country. According to the leading tax expert, Slemrod (2003), there is no supportive evidence that the high taxes will reduce the prosperity in term of GDP per capita. However, by doing the sophisticated econometric analysis such as panel data approach can measure the clear relationship among the taxes and economic growth and other economic indicators. He also mentioned that the clear positive correlation between taxes and prosperity in the developed countries because that country has high tax ratios compared with the other groups of countries. With that, this study concludes that the change in taxes based on the tax policy in a country will give the different impacts to the development of economic. The change in taxes also will influence the amount of saving in the banking institutions and decision of investors to make an investment. The previous studies found the different impacts of the changes in the tax revenue, in which positive and negative impacts to the development of economics in a country. Besides, the different effects of changes in the tax may influence by the several factors such as corruption, inflation rate, the different fiscal policy, population and many more that was links each other effect the economic indicators.

Two studies has been completed by Padovano and Galli (2001; 2002), that confirm the negative effects of high marginal tax rates on economic growth. They found that high marginal tax rates and progressive taxes tended to be negatively associated with long-term economic growth in a country. Stokey and Rebelo (1995) and Turnovsky (1996) shows that the growth rate will reduce if the marginal tax rates increase. The two studies in the same year by Bucovetsky (1991) and Wilson (1991), in which conducted the study of private return on investment and taxes found that the cost for capital holder is also influenced by the rate of taxes on capital. In the post-World War II in United State, the changes in taxes will reduce the U.S's economic development or growth, in which for each 1 percent reduce in taxes will generate the GDP around 2 percent to 3 percent. According to Engen and Skinner (1996), reduce 5 percent in tax rate will increase 0.25 percent on growth in U.S. One of the latest studies by Bretschger (2010) that explored the corporate taxes in OECD countries found that the tax has negative relationship with the openness, growth and amount of total tax revenue.

The negative correlation between taxes and economic growth has been opposed by the several studies that argued there is no evidence that high taxes will impede economic growth. This statement was gives the different opinion and gap about the effects of taxes either it is negative or positive correlation on growth. Two of the previous studies on the different era were gives the similar assumption about the effect of taxes on economic growth. The earliest study by Marsden (1983) and an expert in taxes, Slemrod (2003) found that positive impact of taxes ratios on economic growth in high income or developed countries. The positive relationship of taxes on growth also was supported by Gober and Burns (1997) that found personal income tax, sales tax, corporate income tax and other taxes will generate the economic growth in OECD or industrial countries. Increase in capital income taxes also will increase the economic growth, in which generate the education's spending and long-term growth (Glomm and Ravikumar, 1998 and Uhliga and Yanagawa, 1999).

In order to relate the tax policy for each group of country, this study also involves the inflation rates. The rate of inflation in a country will influence the action of a country due to combat the high inflation rates. The fiscal policy consists two important tools that are taxes and government spending. The government will increase the taxes (reform tax policy) such as tax on goods and services to combat the high inflation rates with reduce the consumption and stabilize the price of goods and services in a country. According to Tanzi (1989), the changes in the inflation rate will affect the excise tax and influenced the demand of product.

There have several objectives why we conduct this study. Firstly is to know the effect of tax structures in the different countries based on the different in level of income to the economic development or growth in a country. Secondly is to explore the different inflation rate for each group of country as the potential variable due to change in the collection of tax revenue. Thirdly is to find either the tax structures have highly significant with other economic indicators such as saving or investment. Fourthly, to examine the effect of tax policy that conducted by the different group of country on the inconsistent effect of growth. This study use more sophisticated technique called panel data approach in order to explore and examine the factors that contribute to the inconsistent effects of tax structures on economic development in a country.

This study consists five sections, in which section 2 describes the literature review that related with this study and section 3 mentions the data and methodology. Section 4 provides the findings of low, lower middle, upper middle, and high income countries. The last section that is section 5 consists the conclusion of this study.

Literature Review 文献综述

Theoretically, the taxes and economic growth has negative correlation, in which increase in taxes will burden the citizen, business and entrepreneurs' activity because it's can reduce the profit for business and increase the cost to run the activities of entrepreneurship. If we compare the tax to GDP ratios among the cross-country, the highest tax to GDP ratio is in the high income or developed country. The studies that examined the correlation between tax to GDP ratio among the countries were conducted by Hinrisch (1966) and Musgrave (1969), in which they found that the developing countries has low tax to GDP ratio compared with developed countries. However, the developed country still has the highest per capita income, highest prosperity and GDP even though the country has higher in tax collection. An expert in tax, Slemrod (2003) in an interviewed was mentioned that taxes in developed country will generate the economy and prosperity. However, the evidence is still not clear and mixed in the cross-country analysis. He was agreed with the tax theory in term of marginal tax rate because higher in that tax will reduce the after-tax reward to working more and discourage people to work more hours. Based on Padovano and Galli (2002), marginal tax rates will reduce the long-term economic growth, in which they found that increase of 10% in marginal tax rates will decrease the annual rate of economic growth by 0.23%. Slemrod also argue if the raising of taxes is for the improvement of education, health care, and infrastructure, it will be good for growth. Gold (1991) suggest that any changes in each component of taxes will influence the performance of economic growth.

The positive effect in developed country and mixed effect of taxes on economic growth actually was found since 1980s. The evidence by Marsden (1983) was found the different effect of tax to GDP ratio on growth in low and high income countries. The low income countries show the negative impact of tax to GDP ratio on growth but positive impact in the high income countries.

This mixed effect in the different levels of income cause by the change in tax policy or the different tax policy in a country that force the economic to shift either increase or decrease. Baunsgaard and Keen (2009), were run the research of tax revenue uses panel data for 117 countries over 32 years, in which estimated the different effect based on the different level of income for each group of countries. According to them, one quarter of revenue in Sub-Saharan Africa is trade taxes and 15% of revenue in Asia and Pacific countries. The other study that was using unbalanced panel data has been completed by Mahdavi (2008), in which he focused the level of taxation in developing countries. He found that if the governments in developing countries increase their tax revenue, it will burden the growth of economic. In order to revive the fiscal crisis in developing countries, Mahdavi suggested restructuring or changing the level of taxes in a country. Gober and Burns (1997) was studied the relationship between taxes and economic growth in 18 industrial countries using sign test also found the positive and significant relationship between total tax revenue and GNP in Switzerland.

More than five of the previous studies that mentions the relationship between taxation, especially personal income taxes and corporate income taxes on growth. According to Arisoy and Unlukaplan (2010) that study the tax composition and growth in Turkey found that corporate income taxes are the most harmful for growth in OECD (2008) followed by personal income taxes and consumption taxes. Corporate income taxes has positive relationship while personal income taxes has negative relationship on growth in 23 OECD countries, see Widmalm (2001). The other study that found the impact of corporate income taxes on growth was conducted by Lee and Gordon (2005). They were studied the relationship among taxation and growth using cross sectional and time series data for the period of 1970-1997 and found the negative effect of corporate income taxes on growth in a country. The other study that focus on OECD countries for the period of 1980-1999 was conducted by Tosun and Abizaden (2005) that found personal income tax will generate the growth of GDP. This is because, per capita income in developed countries is higher than the other countries that was contributed to the highest percentage of total tax revenue and will generate the economy. However, there should be no permanent effects of the tax structure on the growth rate in per capita output, regardless of the size of the misallocations generated by the tax structures (Lee and Gordon, 2004). A paper by Cullen and Gordon (2002) found that the corporate tax is negatively correlated to the economic growth in 70 countries since 1970 to 1997. It is because, if the corporate tax reduce, it will reduce the personal tax revenue and encourage more entrepreneurial activity, in which will generate for economic growth. Holcombe and Lacombe (2004) also found the negative impact of state income taxes on state economic growth.

The previous studies found the evidences of inconsistent effects of taxes based on the direct and indirect taxes. Harberger (1964) has been studied the impact of direct and indirect tax on growth using panel 18 OECD countries from 1966 to 1990 and found that investment was not affected on the switching of taxes from direct to indirect taxes. It is because the labor supply and investment are not affected by the change in composition of taxes. Koch et al (2005) was using South African taxes from 1960 to 2002 found the indirect taxes has negative sign to economic growth. Using the tax mix (indirect and direct taxes), Mamatzakis (2005) shows the growth will increase if the tax mix increase.

Taxes on Investment and Foreign Direct Investment (FDI)

The decision of investment also influence by the changes in the tax structures especially corporate income tax and rate of taxes. Based on the previous studies, return on investment is measured by earning per share (EPS) or dividend per share (DPS). The higher amount of EPS or DPS, the more investors will invest because they will get the higher return on investment. Increase in tax rate or corporate income tax usually will reduce the amount of profit after taxes in the firms and also will reduce the EPS or DPS. A study by Hartman (1984) found that after-tax rate of return and FDI has the strong correlation in United State. The earliest research by Modigliani and Miller (1963) mentioned that personal taxes are favors equity finances while the corporate taxes favor debt finance. Hall and Jorgensen (1967) were agreed with negative relationship between tax rates and rates of capital investment. They found that lower tax rates will encourage the investment and faster the short-run growth for the investment. Research of tax was conducted by Hanlon and Heitzman (2010) that found the manager's investment decision will also affected by the changes in corporate taxes causes by the amount, timing and uncertainty of tax payment will affect net present value of project and decision to invest. Theory of investment and taxes is state the rule for investment, in which the investors will make an investment when the marginal cost less than marginal benefits (Biddle and Hilary, 2006, McNichols and Steubben, 2008 and Biddleetal, 2009).

FDI determination and corporate tax was conducted by Ghinamo, Panteghini, and Revelli (2007) show that corporate tax rate was effect the inflow of FDI in a country. They also found the corporate income tax to personal income tax ratio are lower in developing countries than developed countries especially OECD countries. Hines (1996) and Devereux and Freemen (1995) conduct the survey to know the flows of FDI in the 1980s. They also find that strong effects of tax variables to the FDI. The elasticity of FDI also gives impact to the after-tax return. This statement was proved by Altshuler, Grubert, and Newlon (1998) that conduct a study about FDI and taxes in 58 countries. According to them, the tax elasticity in 1984 is a”‚-1.5a”‚increase to a”‚-2.8a”‚in 1992 means that the FDI is elastic in which the investors are sensitive with the tax change in investment.

Saving and Taxes

The components of tax revenue also will affect the amount of money in financial or banking institutions. This means, one of the factors that will influence people to save their money is changes in taxes. However, according to the classic economist, Denison (1958) that measure the gross private saving rate (GPSR), found that changes in after-tax rate of return and changes in tax policy will not affect the GPSR. The higher taxes will stimulate the economic growth but reduce the incentive to save (Jenkins, 1989). The other studies that determinant the relationship between tax mix and tax policy on saving in developing countries was conducted by Peter and Kerr (2001). They found that during 1970-1994, the private saving in Colombia was reduced cause by the rise in taxes. They also conclude that increase 1 point of tax to GNP ratio will reduce 0.58 point of private saving. A study by Kerr and Monsingh (1998) in South Asian and East Asian using pooled time series and cross sectional data found the significant and inverse relationship between tax-mix variables and savings. Besides, evidence was found by Gordon, Kalambokidis, and Slemrod (2004), that report taxes on capital income in U.S. is less important among tax revenue, in which no net revenue for that tax and relatively give low impact to the investment and saving. While the excise taxes such as cigarettes, liquor, and gasoline are more important to the richest countries.

Effect of inflation rates on taxes

In order to combat the high inflation rates in a country, the government usually will use the fiscal policy or monetary policy. The fiscal policy consists two tools, government spending and tax policy. In tax policy, the government will increase the taxes such as excise tax and taxes on goods and services, in which will increase the price of products and reduce the supply of money or money in circulation. According to Ashworth and Heyndels (2002), real economic growth and inflation rate in a country will affect the change in tax structure. It is because each of the tax components will respond to the change in growth and inflation rate, in which will force the government to reform the different tax policy. The impact of inflation rate on tax was study by Messere (1993), in which found an increase in income taxes it cause by increase in inflation, while the consumption taxes was remain constant and not affected by change in inflation rate. The other study that focuses in OECD countries by Kemmerling (2003) also found the same result, in which income taxes and inflation rate has positive relationship. Due to protect the assets during the high inflation rates, households usually will replace their assets with the less domestically taxes (Mahdavi, 2008).

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