Holding spending constant, it is certainly true that some taxes are
better for growth than other taxes. To summarize a large literature
taxes on capital tend to be very bad for growth because of positive
externalities associated with capital, taxes on income are better and
something like a consumption tax is best for growth.
One of the best paper written in recent years (IMHO) is on the
subject of taxes and growth:
Ohanian, Lee and Thomas Cooley. 1997. “Postwar British Economic Growth
and the Legacy of Keynes”, Journal of Political Economy” ,
vol. 3, (105), 1997, pp. 439 – 472.
Alex
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Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX: 510-568-6040
Email: [EMAIL PROTECTED]
