Belarusian Economic Research and Outreach Center

Open Lecture ”Taxation: Historical Trends and Theoretical Explanation”

Author: Kirill Shakhnov (Einaudi Institute for Economics and Finance, Rome)

Topic: "Taxation: Historical Trends and Theoretical Explanation"

Date and time: August 4, 16:00 - 18:00

Place: Minsk, Gazety “Pravda” Av., 11B, basement floor

Language: English

This study analyzes the dynamics of tax revenues and tax rates for a large set of countries for at least last 50 years. We establish several stylized facts. First, corporate and individual income tax rates have been steadily declining, while value added tax(VAT) has been increasing for the most of the countries. The VAT was introduced in many countries in late 70s and early 80s. Second, the total revenue as % of GDP as well as the share non-tax revenues in total revenue have not changed much. Third, while the share of individual income tax has remained constant, the share of corporate tax has increased in spite of falling tax rates. Fourth, the sale tax revenue has become the most import source of revenue. The recent theoretical explanations cannot account for the observed pattern. We proposed an alternative by incorporating capital mobility into a model of the optimal capital taxation with heterogeneous agents a la Conesa et al (2009).