National Tax Levels And the Rich vs. the Poor

Research Report

National Tax Levels And the Rich vs. the Poor

Abstract

Recognizing there are several intergovernmental and institutional caveats to be made before drawing policy conclusions regarding national Tax/GDP ratios one of the lessons from the global tax literature is that the national (central) government Tax/GDP ratio can serve as an "performance" indicator associated with being a "rich" country. Arguably, higher (and steadier) Tax/GDP ratios help the rich countries carry out the central government responsibilities for macroeconomic stability, and economic growth and development. These higher ratios may reflect an enhanced capacity to make and administer tax policy and/or an increased taste for public goods and income transfers.

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