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Tax Systems in the World: An Empirical Investigation into the Importance of Tax Bases, Administration Costs, Scale and Political Regime

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  • Lawrence Kenny
  • Stanley Winer

Abstract

We study the structure of taxation in a sample of 100 democratic and nondemocratic regimes over three time periods. The results provide strong support for several regularities in the world as a whole, specifically (1) scale effect: utilization of each tax source increases as the government expands, (2) base effect: tax systems rely more heavily on relatively larger tax bases, and (3) administrative cost effect: lower costs of administration lead to increased reliance on the corresponding revenue source. We also investigate the role of political regime and find that democracies rely substantially more on other income taxation, possibly because this tax source requires a higher degree of voluntary compliance. Copyright Springer Science + Business Media, Inc. 2006

Suggested Citation

  • Lawrence Kenny & Stanley Winer, 2006. "Tax Systems in the World: An Empirical Investigation into the Importance of Tax Bases, Administration Costs, Scale and Political Regime," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(2), pages 181-215, May.
    • Handle: RePEc:kap:itaxpf:v:13:y:2006:i:2:p:181-215
    DOI: 10.1007/s10797-006-3564-7
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