Impact Of Taxation On Economic Growth Of A Nation

ABSTRACT

Tax reform are sometimes touted as having strong macro economic growth effects. Using three approaches, we considered the impact of a major tax reform a five percentage point cut in marginal tax rates on the evidence of taxation and growth for a large sample of countries And finally we have investment demand, productivity growth and long term growth rate. The first approach is to examine the historical record of the U.S economy to evaluate whether tax cuts have been associated with the U.s economic growth. The second is to consider result suggest modest effects, on the order of 0.2 to 0.3 percentage point differences ri growth rates in response to a major tax reform. Nevertheless, even such small effects can have a large cumulative impact on living standard.