> > evidence suggest (Cato journal - I believe the fall 1998-issue)
that a
> > tax biurden of around 20 percent of GDP seems to be optimal for
> > economic growth (provided, of course, that it is spent somewhat
wisely).
> > any higher, and economic growth will be reduced
>
> Optimal implies that there will be less growth at rate lower than 20.
> Why is the optimal tax burden not less than 20?
Ask Gwartney - he did the study...
I guess the idea is that some state activities: secuiring a market,
prtecting property, etc. promote economic growth, while other
activities (notably redistribution) hamper with economic growth.
The share of GDP spent on the "core" activities of the state is
roughlty around 20 percent of GDP
- jacob
>
> Fred Foldvary
>
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