LibUK Articles
Taxes and growth |
| Posted by Administrator (admin) on Dec 04 2007 at 7:23 AM |
| LibUK Articles >> Business |
Chris Dillow looks at the relationship between tax and economic growth...
Lower business taxes are good for growth. That's the message of this new paper (pdf) from Patrick Minford and colleagues.
Using data from 76 countries between 1970 and 2000, they estimate that a 10 percentage point cut in tax rates would raise GDP growth by 0.2 percentage points a year.
Whether this is a lot or a little is a matter of taste. What's really odd, though, is that Minford finds a negative relationship between government spending upon education and subsequent growth.
This suggests that, if you want faster economic growth, tax cuts are better than extra spending on education.
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