International Business Management

Year: 2021
Volume: 15
Issue: 4
Page No. 171 - 179

Taxation in Economic Thought

Authors : Amr Gamaleldin Awad and Abrar Fahad Almai

Abstract: This study illustrate the history of Economic thought schools in taxation from classic school and new classic school to Solow growth model and indigenous growth model. The paper plan to use historical method and descriptive-analytical approach to illustrate the history of Economic thought schools in taxation. The paper going to highlights the content of Economic thought history in taxation from the classic school to growth model and indigenous growth model. This study concludes that the classic school supported tax only when it necessary to fund the basic services of the state to carry out its basic duties. While Keynes, he pointed out that taxes should contribute to the redistribution of income and wealth in society because lake for allocate income and wealth in society leads to decline in effective demand which leads to economic recession. for that the government should impose progressive taxes which contribute to the redistribution of income and wealth in society and the increase in effective demand. Solow built his economic growth model based on the role of taxes in enhance economic growth. Solow growth model is based on the fact that increasing government revenues from taxes means increasing savings which increases economic growth if the greater part of the tax revenues is directed to investment. However, a tax negatively affects on Economic growth if tax revenue directed to consumer expenditure. Then, the endogenous growth models stated that economic growth is primarily the result of endogenous variables, rather than exogenous. It argues that improvements in productivity can be tied directly to faster innovation and more investments in human capital. This study is very important for scholars, institutes, universities, research centers, organizations and governments which concern to know and studying taxation in Economic thought.

How to cite this article:

Amr Gamaleldin Awad and Abrar Fahad Almai, 2021. Taxation in Economic Thought. International Business Management, 15: 171-179.

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