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The tax burden, defined as the ratio of the collected taxes in a particular period against the total product, is commonly used to determine the effect of fiscal and tax policies on the socioeconomic structure. The purpose of this study is to examine how the changes in some macroeconomic indicators affect the tax burden.

System generalized method of moments approach is used for 34 Organisation for Economic Co-operation and Development (OECD) members in the period of 1993-2016.

Based on the research findings, variables such as income per capita, foreign trading volume, the capacity of employment, unemployment and economic share of industry sector effect tax burden in a statistically significant and positive direction. The reason that lies behind the positive effect of unemployment on tax burden is the fact that the sense of social state is not abandoned. Thus, it is predicted that the state will increase public transfer expenditures in the short term due to unemployment, this increase will impose a financial burden on the public sector both in the medium and long term and finally, there will be an increase in the tax burden.

Results in the literature suggest that there are many reasons for increasing tax burden such as socio-economic development, financial and organizational structure and the globalization process. However, according to this study, it seems that gross domestic product per capita, the size of the industry sector, openness, employment capacity and unemployment rate also have a positive and significant effect on tax burden in the long run. Ultimately, these results demonstrate that tax burden, one of the most important indicators of the public sector size in the sample of the states and period in hand, is influenced positively by all independent variables and increases slightly but surely. These results suggest that the tax state is still a determinative factor in the socioeconomic field within its taxation tools.

This chapter evaluates the effectiveness of states' research and development (R&D, used to represent creditable research expenses) tax credits. Prior studies report mixed results on the effect of state R&D tax credit incentives. Generally, such studies consider the influence of state R&D tax credits by applying the statutory income tax and R&D credit tax rates. We reexamine the effect of a state's entire tax burden instead of the statutory tax rates in moderating the effectiveness of a state's R&D tax credit incentives. After controlling for several nontax factors, such as the workplace environment, political environment, and workforce education levels in a regression analysis during the 2010–2013 period in 50 states, we find that statewide private-sector R&D spending is a positive function of the R&D tax credit and this effect increases with the overall level of the state tax burden. We attribute this finding to the fact that high tax burdens increase the present value of the R&D tax credits.

During the 2004 presidential campaign, the Kerry campaign claimed that the federal income tax cuts passed between 2001 and 2004 shifted the burden of financing the federal government from upper‐class to middle‐class taxpayers. The purpose of this paper is to determine whether the claim made by the Kerry campaign is valid.

The assumptions made by the Kerry campaign in analyzing the data in the report Effective Federal Tax Rates Under Current Law, 2001‐2014 prepared by the Congressional Budget Office (CBO) were analyzed. It was determined that their analysis was flawed in the way they established their comparisons. The analysis was adjusted, correcting the identified flaws.

After adjusting for the flaws in the analysis by the Kerry campaign, it was determined that the tax cuts actually increased the percentage of taxes paid by the wealthiest taxpayers. Also, if the cuts are not extended, the percentage paid by the wealthiest taxpayers will decrease.

The importance of this paper is not in finding that a political party would manipulate economic data in an attempt to win an election, as this is expected in politics. The larger concern is that the CBO, a nonpartisan organization, validated the claims made by the Kerry campaign. If a nonpartisan organization is going to take a position on an issue related to politics, they need to be sure that the analysis is valid.

Prior studies on the social security tax have focused on it being regressive; a system that is detrimental to savings in the United States; a system that will bankrupt itself; and a host of economic inquiries examining labor market and product demand elasticities and the impact of the substitution effect. However, there is scant evidence on the shifting mechanisms employed by the owners of millions of small businesses in the United States. As a result, this study revisits the issue by surveying 4,431 small businesses in Arkansas, Louisiana and Mississippi (ArkLaMiss). Results indicate, in the ArkLaMiss area, that the largest share of the tax burden is borne by customers. When compared to past literature, a relatively larger portion of the incidence of payroll taxes is likely to fall on employees in the ArkLaMiss, as opposed to the burden being borne by firms and customers. Also, stronger anti-tax sentiment was noted in the ArkLaMiss as compared to prior literature. Little support was found for the proposition that firm size impacts the incidence of taxation. On the other hand, statistical analysis indicates that the industry within which a firm operates was influential in the incidence of taxation. Moreover, in the sample, the banking/financial industry passed the largest percentage of the tax on to employees, the public accounting profession passed the largest percentage on to customers, and the legal profession bore the largest share of the tax in the form of reduced profit.

Justice in taxation depends on implementing the principle of proportionately equal burden on all, where one has no choice but to use the devices of cardinally measurable utility and interpersonal comparisons. Despite levies by multiple levels of government and subdivision into different taxes, the overall principle applies of equal burden. This stands despite connecting up with two related enquiries – equity in allocating public goods and services, and fair distribution of income and wealth after taxation and return of public goods. The elements introduced into the argument are not new, but they are fitted into an overview of just allocation of direct and indirect taxation. While the principles of equity stand in distributing the burden of taxation and benefits of public goods, their translation into practice depends on democratic debate and decision in the free society, so that it is a never‐ending exercise evolving along with the economy and society in question.

The purpose of this paper is to test the effects of government policies on entrepreneurial activity within the 50 US states.

Using panel data and a fixed-effects model, the authors examine the determinants of the nominal establishment entry rate, the nominal establishment exit rate, and the net establishment entry rate. To measure government policy, the authors use the Economic Freedom of North America (EFNA) index published by the Fraser Institute. The authors use both the overall index and its components. The authors also use the state and local tax burden published by the Tax Foundation.

The authors find that a smaller government is associated with a net increase in business establishments. A freer labor market is also associated with a net increase in business establishments. However, the relationship between the tax burden and entrepreneurship is more complex. Using a measurement of the tax burden from the Fraser Institute, the authors find that an increase in taxes is associated with a net decrease in businesses, but the measurement from the Tax Foundation suggests that an increase in taxes is associated with a net increase in businesses.

The results can help policy makers recognize the effects of expenditure and regulation on business formation.

However, the results do not send a clear message on the effects of taxes on entrepreneurship.

The contribution to the literature is the examination of the effect of the components economic freedom on net business entry in the USA, along with comparing the effects of two measurements of tax burden on net business entry.

The paper seeks to analyse the impact of different public policies on inequality, unemployment, growth and the tax burden.

A dynamic general equilibrium model is built, in which growth is driven by endogenous technical progress, to analyse the impacts of several policies (minimum wage, redistribution and R&D subsidies financed by an income tax).

All policies except pure redistribution are better than non‐intervention in terms of growth. The authors distinguish three major policy patterns. The Anglo‐Saxon model is characterised by high growth, high inequality, low unemployment and a low tax burden. The Nordic model combines high growth, low inequality and low unemployment, and a high tax burden. The Continental European model puts together medium inequality and a medium tax burden, and higher long‐term growth is paid for by high unemployment.

The model could be extended by the introduction of educational policy.

The paper distinguishes three configurations that capture the main features of the developments in Anglo‐Saxon countries, Scandinavian countries, and Continental European countries in the 1990s. It thereby provides a general framework to analyse and compare these experiences.

The relationship between the local option sales tax (LOST) and property taxes and own source revenue is not well documented in the literature. This may be due in part to the aggregated nature of the data, which fails to capture different motivations for adoption of LOSTs. Using county-level data from 35 states, this study finds that LOSTs increase own source revenue and in some circumstances decrease property tax burdens. The primary contribution of this research is that it uses a policy variable, the LOST rate, to distinguish between the two types of counties that use their LOST revenues differently. This research represents the first step in bridging the gap between the LOST literature and the tax mix choice literature.