I’ve explained the economics of taxation, which is based on the common-sense notion that you get less productive economic activity when taxes drive a bigger wedge between pre-tax income and post-tax consumption.
Three Italian professors, in a new working paper for the Centre for Economic and International Studies, investigated the relationship between taxes and growth.
We’ll start with a description of the methodology.
In this paper, we revisit a traditional issue in the empirics of growth and economic policy: whether taxation has long-lasting effects…
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