2004Zhongguo Qingnian Zhengzhi Xueyuan xuebaoRequires access

On tax multiplier and the elasticity of tax rate for national income

Tan Zu-yi

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Abstract

After a study in two types of tax multipliers, one can easily find that the national income adjusted by way of tax policies or the economic growth stimulated by decreasing tax is very limited in effect. On the contrary, the argument described above has provided a theoretical support to the governmental increase of tax, and even an evidential support to the idea of negating tax policies and economic growth depending on financial policies. In regard to economic growth, tax policy is a subsidiary policy at most.

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After a study in two types of tax multipliers, one can easily find that the national income adjusted by way of tax policies or the economic growth stimulated by decreasing tax is very limited in effect. On the contrary, the argument described above has provided a theoretical support to the governmental increase of tax, and even an evidential support to the idea of negating tax policies and economic growth depending on financial policies. In regard to economic growth, tax policy is a subsidiary policy at most.

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Available abstract

After a study in two types of tax multipliers, one can easily find that the national income adjusted by way of tax policies or the economic growth stimulated by decreasing tax is very limited in effect. On the contrary, the argument described above has provided a theoretical support to the governmental increase of tax, and even an evidential support to the idea of negating tax policies and economic growth depending on financial policies. In regard to economic growth, tax policy is a subsidiary policy at most.

Key concepts: Economics, Value-added tax, Tax rate, State income tax, Tax reform, Indirect tax, Ad valorem tax, Direct tax

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