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Enrich the Rich!(?) - Income Tax, Income Inequalities and Economic Growth

Kananen, Jonathan LU (2013) NEKH01 20122
Department of Economics
Abstract
This paper examines the effects of an income tax cut on economic growth. The way it is examined is twofold; in part through an increased savings rate and in part through increased inequalities. The former one is considered a more direct effect of the tax cut whereas the last one is considered a more indirect effect. The income tax cut is investigated under the assumptions of the Solow growth model. The Solow growth model helps limit the different possible causational factors of economic growth. The result of this paper is that the cut in income tax fuels eco-nomic growth rates until the new equilibrium has been reached. Thus, there are no long term effects on economic growth. There are, however, long term effects on the level of output.
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author
Kananen, Jonathan LU
supervisor
organization
course
NEKH01 20122
year
type
M2 - Bachelor Degree
subject
keywords
Income tax rate, Solow growth model, income inequalities, economic growth
language
English
id
4025137
date added to LUP
2013-09-17 16:05:42
date last changed
2013-09-17 16:05:42
@misc{4025137,
  abstract     = {This paper examines the effects of an income tax cut on economic growth. The way it is examined is twofold; in part through an increased savings rate and in part through increased inequalities. The former one is considered a more direct effect of the tax cut whereas the last one is considered a more indirect effect. The income tax cut is investigated under the assumptions of the Solow growth model. The Solow growth model helps limit the different possible causational factors of economic growth. The result of this paper is that the cut in income tax fuels eco-nomic growth rates until the new equilibrium has been reached. Thus, there are no long term effects on economic growth. There are, however, long term effects on the level of output.},
  author       = {Kananen, Jonathan},
  keyword      = {Income tax rate,Solow growth model,income inequalities,economic growth},
  language     = {eng},
  note         = {Student Paper},
  title        = {Enrich the Rich!(?) - Income Tax, Income Inequalities and Economic Growth},
  year         = {2013},
}