In the following example, it isn't the taxing itself that promotes growth, but its spending.
If a state uses tax money to attract rich tourists to the area (by advertising, for example), that could promote consumption, in such a way that the tax promotes growth more than it hampers it. Whereas if there was no tax (i.e. if it was voluntary), individual businesses would be reluctant to use their money that way, even if they knew that everybody would be better off if everybody invested their share into the collective fund (prisoner's paradox). I would be interested to know if there are real-world cases of this, or of any tax promoting economic growth. Gustavo At 08:20 PM 31-10-01 +0200, you wrote: >Has anybody read/heard about a tax which does have a positive effect on >the economic growth? The professors at my university say so, but I >wouldn't be so sure so that's the reason I'm asking. > >Also I'm writing my course paper about the effects of the fiscal policy to >economic growth. Any good links, thoughts, ideas etc. would be >appriciated. > >Regards, >Kristjan Kanarik
