Abstract
This paper comprises the research of the impact that taxation exerts on the economic growth rate in Denmark, Norway and Sweden, through an econometric approach during the years 2002 – 2018. The analysis is based on the estimation of a Panel Data model by taking in account fiscal, economic and control factors as explanatory variables.
Highlights
Taxation in Scandinavian countries is a highly debated subject of public policy and is well-renowned for its high level among Denmark, Norway and Sweden
The present paper aims to find a relationship between fiscal policy and economic growth in Scandinavia, considering as general fact that consumption taxes are regressive and have negative effects on economy (Dladla and Khobai, 2018; Neog and Gaur, 2020), while direct taxation has progressive characteristics
The output result shows that taxes on goods and services (GS_TAX) have negative impact on economic growth should an increase in the taxation rates likely materialize (Neog and Gaur, 2020)
Summary
Taxation in Scandinavian countries is a highly debated subject of public policy and is well-renowned for its high level among Denmark, Norway and Sweden. High taxation in Scandinavia is perceived as an efficient and essential support for public services such as healthcare, education, social security and many others. Each tax system of these Scandinavian countries shares common aspects with each other and with many other tax systems in the European countries. During the past century, tax systems have grown complex in order to respond to globalization and economic changes. Entrepreneurship in Scandinavia seems to be successful and flourishing due to the efficiency of the business productivity combined with high taxation. Citizens are repaid by their governments in high quality public services
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