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Since the saving capacity has positive effects on growth and development, the discussions about the factors that can be used to change the saving rate are always up to date. Income and taxes are two important factors determining the saving and expenditures of both individuals and institutions. According to the life cycle model, saving is negative for young who do not work and for the retired. Therefore, the higher the dependency rate, the lower the saving. The increase in the dependency of the young age population can cause the working population to increase their consumption expenditures and to allocate less of their income to saving. On the other hand, the increase in tax burden may lead to a reduction in saving rates due to its negative impact on disposable income. In this context, the aim of this study is to evaluate the effects of young age dependency rate, increase in per capita income and tax burden on gross national saving. For this purpose, ARDL (Autoregressive Distributed Lag Models) boundary test is applied by using the data of G-7 countries for the period of 1979-2017. According to the test results, the increase in tax burden negatively affects national saving, while the increase in per capita income positively affects the saving. Although the coefficient of the young age dependency ratio is negative, the probability value is not significant. [ABSTRACT FROM AUTHOR]

OECD-wide tax burden of labor is relatively high. In the last decade majority of Member States have begun in order to lower the tax burden of labor, reducing the tax rates or the taxable income threshold to be raised. In addition, some countries began tax credit application on low-income workers or increasing the amount of tax credit. Thanks to this kind of tax reforms the tax wedge has relatively decreased, but shows significant differences from country to country. Indeed, the tax wedge for a person over 4% in the 2000-2010 period decreased in some countries, has shown a sharp increase in Turkey. Turkey is one of the highest among OECD members the tax wedge. This also encourages informal employment. To struggle this serious problem is extremely important which reduction of social security and income tax liabilities especially in low-wage. In addition, low-wage workers resemble in the United States in a tax credit system that Turkey will begin even more lower the tax burden. [ABSTRACT FROM AUTHOR]