Laffer Curve Research Papers - Academia.edu (original) (raw)

Trata-se de estudo sobre a eficiência da atividade financeira do Estado ao lume do conceito de " curva de Laffer ". Essa concepção indica que a arrecadação fiscal não cresce proporcionalmente à carga tributária de forma indefinida, mas... more

Trata-se de estudo sobre a eficiência da atividade financeira do Estado ao lume do conceito de " curva de Laffer ". Essa concepção indica que a arrecadação fiscal não cresce proporcionalmente à carga tributária de forma indefinida, mas apenas até determinado ponto, a partir do qual, com nova elevação de tributos, a receita auferida passa a decair. Como objetivos específicos, o estudo desvenda o surgimento do Estado fiscal após o fim do absolutismo e como a tributação se tornou a principal fonte de receita; a seguir, introduz o conceito da curva de Laffer para verificar em que proporção da carga tributária haveria a máxima arrecadação para o Estado. Ao final, utilizando-se, além da pesquisa bibliográfica, de análise de dados empíricos referentes à situação brasileira, se demonstra – e conclui – que o Brasil está, na situação atual, um pouco além da proporção ideal entre carga tributária e PIB, motivo pelo qual uma redução das exações tenderia a elevar sua arrecadação fiscal.

The federation of St. Kitts and Nevis has experienced significant growth due to a change from an economy largely dependent on the sugar industry to a serviced-based economy driven by the tourism and financial services industries. However,... more

The federation of St. Kitts and Nevis has experienced significant growth due to a change from an economy largely dependent on the sugar industry to a serviced-based economy driven by the tourism and financial services industries. However, for the government to maintain macroeconomic stability and uphold a decent standard of living for all citizens, various tax reforms were implemented. As such, the main objective of this study was to examine the impact of taxation on economic growth and revenue generation in the federation of St. Kitts and Nevis. Specifically, the study answered four research questions. First, to what extent does taxes on domestic goods and services (TDGS) impact economic growth (GDP)? Second, to what extent does taxes on income (INCTAX) impact GDP? Third, to what extent does TDGS impact revenue generation (TOTREV)? Fourth, to what extent does INCTAX impact TOTREV?
The study was grounded by the Laffer curve which recognizes a positive impact on revenue generation and economic growth if taxes are set to an optimal rate but a negative impact if in the reverse. The study utilized twenty-six yearly observations from 1990 to 2015. The data was collected from the Eastern Caribbean Central Bank (ECCB) and covered the key variables of this study which were TDGS, GDP, INCTAX, TOTREV and population growth (POP).The study employed the multiple regression technique and revealed four key findings. Firstly, TDGS positively and significantly impact GDP. Secondly, INCTAX positively and significantly impact GDP. Third, TDGS positively and significantly impacts TOTREV. Last, INCTAX positively and significantly impact TOTREV. Furthermore, from a practical standpoint, the findings of this study can be useful for the decision makers of the government of St. Kitts and Nevis and other stakeholders as it relates to fiscal policy and economic growth.

Целью настоящей статьи является уточнение графического изображения проявления лафферова эффекта на основе обобщения накопившегося опыта по изучению свойств кривой Лаффера.

Bók árið 2009, í miðri skattahækkanahrinu, um fimm brýnar spurningar: Í hvers konar hagkerfi getur fólk brotist úr fátækt? Véku Íslendingar af norrænu leiðinni 1991–2004? Hvaða áhrif höfðu skattalækkanirnar frá 1991? Eru auðlinda- og... more

Bók árið 2009, í miðri skattahækkanahrinu, um fimm brýnar spurningar: Í hvers konar hagkerfi getur fólk brotist úr fátækt? Véku Íslendingar af norrænu leiðinni 1991–2004? Hvaða áhrif höfðu skattalækkanirnar frá 1991? Eru auðlinda- og umhverfisskattar hagkvæmir? Hvaða áhrif munu fyrirhugaðar skattahækkanir hafa?

The academic literature analyzes the fiscality concern from all points of view, and the question which pressed upon the theoreticians and also the practitioners of the last decades remains: which is the adequate level of the fiscality?... more

The academic literature analyzes the fiscality concern from all points of view, and the question which pressed upon the theoreticians and also the practitioners of the last decades remains: which is the adequate level of the fiscality? The difficulty in answering the question ...

Recent research on the unobserved economy suggests that the phenomenon has important implications for both macroeconomic policy and public finance. Attention is focused on the public finance implications by developing a simple macro model... more

Recent research on the unobserved economy suggests that the phenomenon has important implications for both macroeconomic policy and public finance. Attention is focused on the public finance implications by developing a simple macro model from which it is possible to derive a Laffer curve. The model reveals that the shape and position of the Laffer curve depend upon the strength of supply side effects, the progressivity of the tax system and the size of the unobserved economy. Using alternative parameterizations of each of these effects, it is possible to obtain rough empirical estimates of the Laffer curve for Sweden.

As global economies struggle to recover, their Keynesian policy prescriptions seem exhausted. More government spending and more monetary stimuli are simply not possible. Consequently, all eyes turn to the “other”, long discredited model:... more

As global economies struggle to recover, their Keynesian policy prescriptions seem exhausted. More government spending and more monetary stimuli are simply not possible. Consequently, all eyes turn to the “other”, long discredited model: supply-side economics. But how can Keynesian governments reconcile themselves to this other extreme? In this remarkable and exceptionally timely research monograph, the authors find a way to “marry” the two paradigms via the common ground of tax cuts. Both models understand and advocate the benefits of tax cuts. Their transmission mechanisms affect aggregate demand and supply differently, but, ultimately, for both, the net effect is positive. President John F. Kennedy, a Keynesian, was the last major policy maker that understood the benefits of tax cuts—he understood the Keynesian demand-side effect as well as the effect driven by the supply-side on businesses. He understood that tax cuts “overlapped” both paradigms. It is time again for such an approach. In fact, this may be the only “macroeconomic bullet” left for policy makers. This volume explores this policy synthesis in rigorous academic detail without sacrificing the intuitive discussions that are imperative for non-academics. Anyone seriously interest in the future of global macropolicy needs to be aware of the Laffer-Keynensian synthesis as elaborated in this perfectly-time monograph written by two scholars in the field. Prof. Farrokh Langdana, Ph.D., Director, Rutgers Executive MBA and Professor, Finance/Economics, Rutgers Business School.
Professors Ananiashvili and Papava have produced a masterful synthesis and expansion of existing theories on how taxes impact economic activity and growth. The channels through which taxes impact economic activity that they consider and synthesize include the direct impact of taxes on aggregate demand, the connection between taxes and government spending, financial market effects, and supply side effects. Particular attention is paid to how the impact of taxes on economic activity likely differs between highly developed economies (where most of the analysis to date has taken place) and developing or transition economies. Dr. Louis Ederington, Michael F. Price Chair in Finance and George Lynn Cross Professor,
Price College of Business, University of Oklahoma.
Economists of the Georgian school have made a big contribution in the direction to construct alternative algorithms for computing Laffer points. Iuri Ananiashvili and Vladimer Papava tried to construct a synthetic system that would accommodate both demand theory based on the Keynes multiplier concept and supply-side model. Dr. Evgeny Balatsky, Chief Research Fellow at the Central Economic Mathematical Institute, Russian Academy of Sciences.

A novel cubic integrated economic model is developed by extending synthetic economic model, with arranging total economic quantities at horizontal coordinate and relative economic rates at other coordinates. This model is suggested as a... more

A novel cubic integrated economic model is developed by extending synthetic economic model, with arranging total economic quantities at horizontal coordinate and relative economic rates at other coordinates. This model is suggested as a new framework for macroeconomic analysis. While the cubic model integrates the existing models of Mundell-Fleming model, money supply-demand curve, Laffer curve and Phillips curve, it is also foreseen that unknown interrelationships might be probed in future research.

The objective of this paper is to revisit as well as empirically examine an old but still discussed postulate, the Khaldun-Laffer curve, on the basis of personal income tax by making use annual time-series data for Turkey for the period... more

The objective of this paper is to revisit as well as empirically examine an old but still discussed postulate, the Khaldun-Laffer curve, on the basis of personal income tax by making use annual time-series data for Turkey for the period 1970-2015. The findings of the paper confirm the validity of the Khaldun-Laffer curve hypothesis. In addition, we infer that the optimal tax rate that maximizes the tax revenue generated from personal income taxation in Turkey is 15.03 percent. This rate is well-below than the current rate which we estimate as 15.37 percent, implying that Turkey's current tax rate for personal income tax takes place in the prohibitive range of the Khaldun-Laffer curve. These findings suggest that the current tax rate should be lowered and to its optimal level to collect more tax revenue. Getting down the current rate to its revenue-maximizing rate not only would it enable the Turkish authorities to collect more revenues with a relatively lower rate, but also would allow them to minimize the substitution effects of personal income tax while maximizing the income revenues from it.

The federation of St. Kitts and Nevis has experienced significant growth due to a change from an economy largely dependent on the sugar industry to a serviced-based economy driven by the tourism and financial services industries. However,... more

The federation of St. Kitts and Nevis has experienced significant growth due to a change from an economy largely dependent on the sugar industry to a serviced-based economy driven by the tourism and financial services industries. However, for the government to maintain macroeconomic stability and uphold a decent standard of living for all citizens, various tax reforms were implemented. As such, the main objective of this study was to examine the impact of taxation on economic growth and revenue generation in the federation of St. Kitts and Nevis. Specifically, the study answered four research questions. First, to what extent does taxes on domestic goods and services (TDGS) impact economic growth (GDP)? Second, to what extent does taxes on income (INCTAX) impact GDP? Third, to what extent does TDGS impact revenue generation (TOTREV)? Fourth, to what extent does INCTAX impact TOTREV? The study was grounded by the Laffer curve which recognizes a positive impact on revenue generation and economic growth if taxes are set to an optimal rate but a negative impact if in the reverse. The study utilized twenty-six yearly observations from 1990 to 2015. The data was collected from the Eastern Caribbean Central Bank (ECCB) and covered the key variables of this study which were TDGS, GDP, INCTAX, TOTREV and population growth (POP).The study employed the multiple regression technique and revealed four key findings. Firstly, TDGS positively and significantly impact GDP. Secondly, INCTAX positively and significantly impact GDP. Third, TDGS positively and significantly impacts TOTREV. Last, INCTAX positively and significantly impact TOTREV. Furthermore, from a practical standpoint, the findings of this study can be useful for the decision makers of the government of St. Kitts and Nevis and other stakeholders as it relates to fiscal policy and economic growth.

Abstract. Optimality of fiscal policy is an issue widely debated in the literature from multiple perspectives. One way to address this problem is with the Laffer curve, causing the correlation between tax burden and tax revenue. This... more

Abstract. Optimality of fiscal policy is an issue widely debated in the literature from multiple perspectives. One way to address this problem is with the Laffer curve, causing the correlation between tax burden and tax revenue. This paper addresses the correlation with Laffer curve for income tax made during the period 2000-2010, highlighting the fact that the Romanian economy lies in the inadmissible slope of the curve, both in analyzing the entire period, and in the part of each year. Moreover, this result reveals the existence of unnecessary redistribution of income in the Romanian economy during the period under review.

This paper discusses the effects of a green tax reform in an AK growth model without abatement activities and with a negative environmental externality in utility function. There is also a non-optimal level of public spending. The results... more

This paper discusses the effects of a green tax reform in an AK growth model without abatement activities and with a negative environmental externality in utility function. There is also a non-optimal level of public spending. The results depend on the financing source of public spending. When there is not public debt, a revenue-neutral green tax reform has not any effect on pollution, growth and welfare. On the contrary, when short-run deficits are financed by debt issuing, a variety of green tax reforms increase welfare. Nevertheless, in this framework, non-green tax reforms are also welfare improving.

This article, the second of three, reviews the historical origins of the Laffer Curve from the Middle Ages through the 19th century. It begins with the work of Muslim philosopher Ibn Khaldun in the 14th century, whose work came to the... more

This article, the second of three, reviews the historical origins of the Laffer Curve from the Middle Ages through the 19th century. It begins with the work of Muslim philosopher Ibn Khaldun in the 14th century, whose work came to the attention of economist Robert Mundell in 1971. Mundell brought it to the attention of journalist Jude Wanniski of the Wall Street Journal. Ronald Reagan mentioned Khaldun by name on 11 different occasions as an influence on his thinking.The article also discusses the long-lasting impact of essayist Jonathan Swift, who observed in 1728 that higher tariff rates often led to a decline in revenue. Adam Smith, David Hume, Alexander Hamilton, Jean-Baptiste Say and James Madison are just a few of those who cited Swift's observation in their discussions of tax policy.Finally, the article reviews 19th century tariff history and notes that discussions of the revenue impact of changes in rates of duty often invoked Laffer Curve arguments.

Laffer curve assumes that in case the spendable income increases after tax, investors tends to make much more investment. In this paper, tax policies were examined over the period of 1980- 2014 for Turkish economy through four (4)... more

Laffer curve assumes that in case the spendable income increases after tax, investors tends to
make much more investment. In this paper, tax policies were examined over the period of 1980-
2014 for Turkish economy through four (4) different models. This includes ADF Unit root test,
total tax variable, direct tax variable, and income tax variable. They were tested for each model
in order to have a better understanding of how tax policies are appropriate for the Turkish
economy in the light of Laffer curve. For each model, the shape of the Laffer curve was found
as a parallel of theoretical expectations. Besides, both tax rates that make tax
revenues maximum and minimum were not found appropriate with the theoretical
expectation.

Метою даноï сттaтi є уточнения граничного зображення виявлення лафферового ефекгу на основ! узагальнення нагромадженого досвщу з вивчення властивостей кривоУ Лаффера.

In a corrupt tax administration a rise in tax ratesets off complicated strategic moves by both taxpayersand administrators. It is shown that in somecircumstances, this may bring about Laffer likebehavior of overall tax revenue, i.e. a... more

In a corrupt tax administration a rise in tax ratesets off complicated strategic moves by both taxpayersand administrators. It is shown that in somecircumstances, this may bring about Laffer likebehavior of overall tax revenue, i.e. a higher taxrate results in smaller net revenue for thegovernment. Further, a more intense tax effort byincreasing the number of returns audited may alsoreduce net revenues. Finally if tax and fine ratespositively influence the level of corruption in theadministration, these outcomes become more likely.

This paper studies the economic determinants of corporate tax revenue to Gross Domestic Product (GDP) across European Union members over the period 1998-2009. The Feasible Generalized Least Squares (FGLS) regression results suggest that... more

This paper studies the economic determinants of corporate tax revenue to Gross Domestic Product (GDP) across European Union members over the period 1998-2009. The Feasible Generalized Least Squares (FGLS) regression results suggest that structural, cyclical, international and institutional factors such as GDP, Government Deficit, Industry Turnover, Unemployment, Number of Enterprises, Trade Openness, Foreign Direct Investment (FDI) and Corruption affect revenue

The public managers worries to increase the local government revenues are almost always related with changes in the tax rates, affecting all the agents in the economy. However, at the same time tax exeptions are used like policy... more

The public managers worries to increase the local government revenues are almost always related with changes in the tax rates, affecting all the agents in the economy. However, at the same time tax exeptions are used like policy instrument in order to achieve economic growth in some sectors, increasing the pressure over some other sectors. This document analize the effect of the tax rates changes over the local government revenues by the estimation of elasticities. This relation is known as the Laffer Courve. The main results show an inelastic relation between the tax rate and the revenues, wich means that an increase of 1% in the tax rate generate an increase in local government revenues in less than a 1%. The results of the model sugesst that a local policy oriented to raise the local government revenues increasing the tax rate is not effective.

The fiscal pressure requires certain limits of affordability for taxpayers. These limits are imposed by the reactions of taxpayers who can resist to compulsory levies increase, reacting with evasion, fraud, reduce productive activity or... more

The fiscal pressure requires certain limits of affordability for taxpayers. These limits are imposed by the reactions of taxpayers who can resist to compulsory levies increase, reacting with evasion, fraud, reduce productive activity or even riots. If by a certain time, the tax pay is made voluntarily by the honest taxpayer, at a time when taxes exceed certain limits of

The sovereign parties and movements that are coming to the fore in most Western countries have as their common denominator, of economic policy, the proposal for a general reduction of taxes based on the theoretical hypotheses of Arthur... more

The sovereign parties and movements that are coming to the fore in most Western countries have as their common denominator, of economic policy, the proposal for a general reduction of taxes based on the theoretical hypotheses of Arthur Laffer. Tax cuts to the wealthier classes as experienced in the United States by Ronald Reagan and as applied today by Donald Trump, are re-proposed in other terms in the form of Flat-rate Tax regimes. The limits of this proposal lie precisely in the long-term effects that these policies had on in the American social and economic fabric, in the evanescence, at the limits of unrealism, of the theoretical hypothesis on which the Laffer curve is based and in the possible catastrophic effects that such a policy could have on the public accounts of an indebted country, such as Italy. Promising fewer taxes can bring political consensus in the short term but can be a harbinger of economic disaster in the long run.
Abstract I partiti e i movimenti sovranisti che stanno salendo alla ribalta in gran parte dei paesi occidentali hanno come comune denominatore, di politica economica, la proposta di una riduzione generalizzata delle tasse sulla scorta delle ipotesi teoriche di Arthur Laffer. I tagli delle tasse alle classi più abbienti così come sperimentate negli Stati Uniti da Ronald Reagan e come applicate anche oggi da Donald Trump, vengono riproposte in altri termini sotto forma di regimi fiscali forfettari come la "Flat Tax". I limiti di questa proposta risiedono proprio negli effetti a lungo termine che tali politiche hanno avuto sul tessuto sociale ed economico statunitense, nell'evanescenza, ai limiti dell'irrealismo, delle ipotesi teoriche su cui si fonda la curva di Laffer e nei possibili effetti catastrofici che una tale politica potrebbe avere sui conti pubblici di un paese indebitato, come l'Italia. Promettere meno tasse può portare consensi politici nel breve periodo, ma non è detto che non sia foriero di disastri economici nel lungo.

This paper presents different approaches how to integrate the Laffer curve concept which is based on microeconomic considerations (disincentives of taxes) into simple macroeconomic models. The informal economy as well illicit cash are... more

This paper presents different approaches how to integrate the Laffer curve concept which is based on microeconomic considerations (disincentives of taxes) into simple macroeconomic models. The informal economy as well illicit cash are taken into consideration and supplement standard IS/LM-analysis as well as the Neoclassical Synthesis. Especially within the latter approach deflationary processes can be explained as consequence of expansive fiscal policy measures.

Which influence does taxation have on economic growth? This paper describes the different taxes and tax systems and gives an first empirical analysis for the multifold impaxts that taxes might have on economic growth. Time series and... more

Which influence does taxation have on economic growth? This paper describes the different taxes and tax systems and gives an first empirical analysis for the multifold impaxts that taxes might have on economic growth. Time series and cross section analysis show that there is some impact of tax burden but a clear proof for the Laffer curve hypothesis has not been found.