The Tax Policy from an Economic Growth Perspective

This article summarizes the evidence on the relationship between tax policy and economic growth, referring to several case studies providing more substance and detail. Potential negative effects of tax policy on economic growth have been addressed in the debates on whether to increase taxes to redu...

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Main Author: Dorel NOROC
Format: Article
Language:English
Published: Galati University Press 2025-04-01
Series:ACROSS
Subjects:
Online Access:https://www.gup.ugal.ro/ugaljournals/index.php/across/article/view/7530
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author Dorel NOROC
author_facet Dorel NOROC
author_sort Dorel NOROC
collection DOAJ
description This article summarizes the evidence on the relationship between tax policy and economic growth, referring to several case studies providing more substance and detail. Potential negative effects of tax policy on economic growth have been addressed in the debates on whether to increase taxes to reduce the deficit and reform taxes by broadening the base to lower tax rates. This is a key element of modern trends in public finance and macroeconomics. Many economists have tried to explain the correlation between tax policy and economic growth. However, many dilemmas have remained open, and the empirical relationship between taxes and growth seems much more complex than theoretical findings suggest. The impact of taxes on growth can be noticed both in terms of efficiency and changes in equity that taxes introduce to the economy. The article analyzes the correlation between tax policy and economic growth through the prism of 3 components: (i) the level of taxation, (ii) the structure, and (iii) the complexity of the taxation system. In addition, the article reviews if there is a correlation between the level of taxation or its change and the country’s development level.
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spelling doaj-art-5bd03bb3a3d84f5a905fb3b73ceb8a6e2025-08-20T02:16:23ZengGalati University PressACROSS2602-14632025-04-0161The Tax Policy from an Economic Growth PerspectiveDorel NOROC0Academy of Economic Studies of Moldova (Republic of Moldova) This article summarizes the evidence on the relationship between tax policy and economic growth, referring to several case studies providing more substance and detail. Potential negative effects of tax policy on economic growth have been addressed in the debates on whether to increase taxes to reduce the deficit and reform taxes by broadening the base to lower tax rates. This is a key element of modern trends in public finance and macroeconomics. Many economists have tried to explain the correlation between tax policy and economic growth. However, many dilemmas have remained open, and the empirical relationship between taxes and growth seems much more complex than theoretical findings suggest. The impact of taxes on growth can be noticed both in terms of efficiency and changes in equity that taxes introduce to the economy. The article analyzes the correlation between tax policy and economic growth through the prism of 3 components: (i) the level of taxation, (ii) the structure, and (iii) the complexity of the taxation system. In addition, the article reviews if there is a correlation between the level of taxation or its change and the country’s development level. https://www.gup.ugal.ro/ugaljournals/index.php/across/article/view/7530tax policytax revenuesstructure of the taxation systemincome redistribution
spellingShingle Dorel NOROC
The Tax Policy from an Economic Growth Perspective
ACROSS
tax policy
tax revenues
structure of the taxation system
income redistribution
title The Tax Policy from an Economic Growth Perspective
title_full The Tax Policy from an Economic Growth Perspective
title_fullStr The Tax Policy from an Economic Growth Perspective
title_full_unstemmed The Tax Policy from an Economic Growth Perspective
title_short The Tax Policy from an Economic Growth Perspective
title_sort tax policy from an economic growth perspective
topic tax policy
tax revenues
structure of the taxation system
income redistribution
url https://www.gup.ugal.ro/ugaljournals/index.php/across/article/view/7530
work_keys_str_mv AT dorelnoroc thetaxpolicyfromaneconomicgrowthperspective
AT dorelnoroc taxpolicyfromaneconomicgrowthperspective