Tax Buoyancy in OECD Countries

By Vincent Belinga, Dora Benedek, Ruud A. de Mooij, John Norregaard

June 19, 2014

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Format: Chicago

Vincent Belinga, Dora Benedek, Ruud A. de Mooij, and John Norregaard. Tax Buoyancy in OECD Countries, (USA: International Monetary Fund, 2014) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

By how much will faster economic growth boost government revenue? This paper estimates short- and long-run tax buoyancy in OECD countries between 1965 and 2012. We find that, for aggregate tax revenues, short-run tax buoyancy does not significantly differ from one in the majority of countries; yet, it has increased since the late 1980s so that tax systems have generally become better automatic stabilizers. Long-run buoyancy exceeds one in about half of the OECD countries, implying that GDP growth has helped improve structural fiscal deficit ratios. Corporate taxes are by far the most buoyant, while excises and property taxes are the least buoyant. For personal income taxes and social contributions, short- and long-run buoyancies have declined since the late 1980s and have, on average, become lower than one.

Subject: Corporate income tax, Personal income tax, Property tax, Revenue administration, Taxes, Value-added tax

Keywords: Automatic stabilizers, Buoyancy estimate, Corporate income tax, Error Correction Model, OECD, OECD country, OECD revenue statistics, Personal income tax, Property tax, Revenue performance, Tax buoyancy, Tax revenue, Value-added tax, WP

Publication Details

Pages:

18
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2014/110
Stock No:

WPIEA2014110
ISBN:

9781498305075
ISSN:

1018-5941

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