Volume 8, Issue 28 (7-2017)                   jemr 2017, 8(28): 7-33 | Back to browse issues page

XML Persian Abstract Print

Download citation:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:

Abbasian E, Jafari M, Nasiroleslami E, Farzaneh Mohammadi F. The Short and Long-run Elasticities of Tax Base Response to Business Cycles in Iran. jemr 2017; 8 (28) :7-33
URL: http://jemr.khu.ac.ir/article-1-1454-en.html
1- Bu ali sina university , e.abbasian@gmail.com
2- lorestan university
3- bu ali sina university
Abstract:   (5458 Views)
In recent years, with increasing of international sanctions and oil revenues falling in Iran, more attention has paid to public spending and taxes as a source of government financing. In this regard, numerous studies have focused on the issue of taxation and its role in economic development. However, the most studies in Iran analyses the role of taxes on macroeconomic variables such as economic growth, inflation and income inequality, and there is no research in the row of the changes in tax income over the business cycle. In this study, using the dynamic least squares method, short and long-run elasticity of tax bases in Iran in response to changes in GDP over the period 1973-2014 is calculated. The results shows that in the long run, the elasticity of income and corporate tax are statistically greater than one and for other tax bases are not significantly different from the unit. In the short run, elasticity of corporate tax is different from unit and other tax bases were not significantly different than unity. According to these results, it is suggested that the Iranian government should have less focusing on income and corporate tax during the recession period
Full-Text [PDF 2999 kb]   (1488 Downloads)    
Type of Study: Applicable | Subject: بخش عمومی
Received: 2016/07/18 | Accepted: 2017/06/14 | Published: 2017/09/17

1. Afshari, Zahra, Javan, Mourashin and Shirin Bakhsh Shamsollah, (2012), The role of fiscal automatic stabilizer in business cycles in selected oil exporting countries , Quarterly Journal of Economic Research and policies, issue 12, No: 47, PP: 21-50.
2. Ayenew, W. (2016). Determinants of Tax Revenue in Ethiopia (Johansen Co-Integration Approach). International Journal of Business, Economics and Management, 3(6), 69-84. [DOI:10.18488/journal.62/2016.3.6/]
3. Bruce, D., Fox, W. F., & Tuttle, M. H. (2006). Tax base Elasticities: A multi-state analysis of long-run and short-run dynamics. Southern economic Journal, 315-341. [DOI:10.2307/20111894]
4. Bruckner, M. (2012). An instrumental variables approach to estimating tax revenue Elasticity's: Evidence from Sub-Saharan Africa. Journal of Development Economics, 98(2), 220-227.‌ [DOI:10.1016/j.jdeveco.2011.07.006]
5. Enders, W. (2004). Applied Econometric Time Series. Second Edition. Wiley Series in Probability and Statistics. New York, NY: John Wiley & Sons, Inc.
6. Freed, E. (2013). The response of tax bases to the business cycle: the case of Alberta.
7. Geraeinezhad Gholamreza, Chapardar Elaheh, (2012), A Survey on the Determinants of Tax Revenue in Iran, Quarterly Journal of Management System (Financial Economics and Development): November 2012, Volume 6, Number 20, PP: 69-92.
8. Greenwood, J., & Huffman, G. W. (1991). Tax analysis in a real-business-cycle model: On measuring Harberger triangles and Okun gaps. Journal of Monetary Economics, 27(2), 167-190. [DOI:10.1016/0304-3932(91)90040-U]
9. Hansen, B. E. (2002). Tests for parameter instability in regressions with I (1) processes. Journal of Business & Economic Statistics, 20(1), 45-59. [DOI:10.1198/073500102753410381]
10. Laffer, A. B. (2004). The Laffer curve: Past, present, and future.
11. Machado, R., & Zuloeta, J. (2012). The impact of the business cycle on elasticities of tax revenue in Latin America. Inter-American Development Bank.
12. Moreno, M. A., & Maita, M. (2014). Tax elasticity in Venezuela: A dynamic cointegration approach.
13. Nasiroleslami, Ebrahim, teimoor rahmani, hamid abrishami,(2012), "Tax Revenue Diversification for Achieving the Stability of the Government's Revenue in Iran Based on the Portfolio Theory Approach." Quarterly Journal of Applied Economics Studies,1, No. 3 (2012): 1-26.
14. Kim, Dukpa and Pierre Perron (2009). Unit Root Tests Allowing for a Break in the Trend Function at an Unknown Time Under Both the Null and Alternative Hypotheses. Journal of Econometrics, 148, 1-13. [DOI:10.1016/j.jeconom.2008.08.019]
15. Newey, W. K. and K. D. West. (1987). A Simple, Positive Semi-definite Heteroskedascity and Autocorrelation Consistent Covariance Matrix. Econometrica. [DOI:10.2307/1913610]
16. Sancak, C., Velloso, R., & Xing, J. (2010). Tax revenue response to the business cycle. IMF Working Papers, 1-21. [DOI:10.5089/9781451982145.001]
17. Sobel, R. S., & Holcombe, R. G. (1996). Measuring the growth and variability of tax bases over the business cycle. National Tax Journal, 535-552.
18. Stock, J. H., & Watson, M. W. (1993). A simple estimator of cointegrating vectors in higher order integrated systems. Econometrica: Journal of the Econometric Society, 783-820. [DOI:10.2307/2951763]
19. Wanniski, J. (1978). Taxes, revenues, and the Laffer curve. The Public Interest, (50), 3.

Add your comments about this article : Your username or Email:

Send email to the article author

Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

© 2024 CC BY-NC 4.0 | Journal of Economic Modeling Research

Designed & Developed by : Yektaweb