THE MEMBER STATES OF NORTH EUROPEAN UNION AND LAFFER’S THEORY

BUNESCU Liliana, Lucian Blaga University of Sibiu, Romania

Abstract:
In most cases, the current situation of a country or another depends on the historical evolution of its own tax system, especially on the method that it was designed and applied in practice. By the reforms implemented, governments have a difficult task to accomplish, namely finding formulas that provide the financial resources necessary for the functioning of public institutions and reducing the tax burden to taxpayers. This paper aims to determine, by using graphical representation of Laffer’s curve, the type of relation between tax burden and tax revenues in Denmark, Sweden, Finland, Estonia, Latvia and Lithuania. The research is based on data provided by the European Commission for18 years. Conclusions for the EU Nordic states refer to the fact that the optimum values of tax burden are not closed to the maximum tax burden applied by them, they are lower (except for Lithuania). The differences are considerable high, even of 7.3 percentages for Sweden and 4.5 percentages for Latvia. The optimal value of tax burden varies between 29.2% in Latvia and 48.1% in Denmark. Moreover, Finland and Estonia are positioned in the non-admissible area of this theory, while the other four countries have a fluctuant position.

Keywords: fiscal optimum, tax, tax policy

JEL Classification: H21

Volume: 67, Issue: Supplement

Pages: 27 - 39

Publication date: September, 2015

Download the article: http://economice.ulbsibiu.ro/revista.economica/archive/suplimente/67S02bunescu.pdf

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