The impact of taxation on growth: the case of Greece

Abstract

Several empirical papers have studied the negative effects of taxation on economic activities and especially on economic growth. There are several ways to estimate the negative effects of several kinds of taxation. The majority of authors analyses how tax on income influences economic growth and how taxes on corporate income affect economic growth. Other articles examine how to design an effective tax policy for economic recovery and growth. The analysis focuses on the impact of tax structures to long- run growth. This article examines how distortionary taxation and non-distortionary taxation influence growth. Specifically, in the empirical analysis, this paper uses different kinds of taxes such as taxes on income. All fiscal variables are expressed as percentage of GDP and were extracted from IMF database. Empirical analysis used time series for Greece from 1973 until 2018.

Keywords

• taxation
• economic growth
• time series