Taxation and the household saving rate: evidence from OECD countries

Abstract

This paper analyzes anew the relationship between taxation and the household saving rate. On the basis of standard savings and tax revenue data from a sample of OECD countries, it provides compelling empirical evidence of a powerful impact of taxes on household savings. In particular, income taxes are shown to affect negatively the household saving rate much more than consumption taxes. JEL Codes: E21, H24, H31

Keywords

• Consumption
• Revenue
• Saving
• Tax
• Taxation
• Taxes