TAXATION: AND ITS ROLE IN ECONOMIC GROWTH.

The article discusses the role played by taxation in the growth performance of an economy. For explanation purposes, views on taxation and economic growth have been divided into three by the author: the taxation-is-inimical-to-growth perspective, the diverse perspective on saving, investment and the tax system, and government intervention through the tax system. As to the first view, the author claims that tax reform thus implies base broadening in income and consumption taxation combined with a reduction of marginal tax rates. As to the second view, he says that taxation policies do work through securing a higher after-tax rate of return to saving. Moreover, as to the third view, the author asserts that such intervention may further improve the finances of the government.