The impact of the total tax rate reduction on public services provided in Romania

Adina TRANDAFIR

Abstract


 Against the background of economic globalization, governments tend to take tax measures disadvantageous to society in order to increase the attractiveness of the business environment. A common measures for this purpose is the reduction in tax rate. According to the classical theory of tax competition such measure leads to under the provision of public goods. This article aims to show, through an econometric analysis, whether in Romania, in the period 2006-2013, reducing total tax rate had a negative impact on public services. For this, using linear regression technique, the article analysed the correlation between total tax rate and the variation in the share of the main public service spending in GDP.

 


Keywords


total tax rate, public services, tax collection, tax competition, social impact

Full Text:

PDF

References


Ballard, C. (1990), “Marginal welfare cost calculations: differential analysis versus balanced budget analysis”, Journal of Public Economics, 41: 263-276.

Bebeşelea, M. (2008), “The financial-accounting treatment of taxes”, Annals of Spiru Haret University- Economics Series, 8(1): 53-62

Bucovetsky S., Marchand M. and Pestieau P. (1998), “Tax Competition and the Revelation of Preferences for Public Expenditure”, Journal of Urban Economics 44: 367-390.

Creedy, J. (2000), “Measuring welfare changes and the excess burden of taxation”, Bulletin of Economic Research, 52(1): 1-47.

Mayshar, J. (1990), “On measures of excess burden and their interpretation”, Journal of Public Economics, 43: 263-289.

Oates W.E. (1972), Fiscal Federalism, New York: Harcourt Brace Jovanovich

Wilson J. (1999), “Theories of tax competition”, National Tax Journal, 52: 269-304

Zodrow G. and Mieszkowski P. (1986), “Pigou, Tiebout, property taxation and the under provision of local public goods”, Journal of Urban Economics, 19: 356-370.

*** www.insse.ro

*** www.mfinante.ro/execbug.html




DOI: https://doi.org/10.26458/1433

Copyright (c) 2014 author

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.


As to respect GDPR, this site do not allow free registation. Please contact us at: ashues@spiruharet.ro

GDPR Policy:

Please read the statement below:
Processing of personal data and free movement of these data

Registering with this site the author agree with the collection, processing and use of his personal data, exclusively within the ASHUES journal.


 

AWARDS 

WILL BE CONFERRED AT THE END OF THE YEAR

To crown and encourage research efforts of the authors, at the end of a year of publishing our journal board will award online the best papers by distinctions:

1. Best Original Paper Award -  for the paper that has brought something completely new in the reader's attention (a new concept, a new trend, a new proposal in research, etc.)

2. Excellence Award - for the most cited paper and visualized in the online environment during the year

3. First, Second and Third Award- for the best documented and substantiated papers during the year

4. Special Award - to award PhD students and postdocs for the most well documented and substantiated paper


Administred:Rocsana B. Manea Tonis

http://icourses.wix.com/itmk