Impact of Global Recession on Selected OECD Countries: A Panel Data Analysis
The tax burden on wages, profits, property, and goods or services has a serious impact on cross-country competiveness, something that, in turn, impinges strongly on the actual economy of common markets such as the European Union (EU). While the mobility of productive factors is directly related with country tax-regime differences, government budget funding from tax revenues and rates are the main fiscal policy tools. This article analyzes the trends, similarities and differences between the tax regimes of European Monetary Union (EMU) for the period from 1995 to 2019. The methodologies we employ include time series analysis, regression analysis and multivariate cluster analysis. The data are mainly collected from the OECD database and tax revenue departments at country level. We argue that there are significant differences among the tax regimes of EU countries and that no policy has been implemented to ensure tax homogeneity across the EU, nor is there any likelihood of such. The anarchy in fiscal policy is an obstacle for the European Integration. Budget deficits have an impact on taxation and countries, invariably, manage the recent debt crisis by selecting different taxes as fiscal policy tools. Our article presents the differences between tax regimes of EMU countries and shows that the level of economic growth affects the structure of taxes at work and alters the performance of different types of taxes; is also wishes to explain the factors that differentiate tax regimes by using multi dimensional criteria and variance analysis. Our work contributes to the debate toward a common tax regime between EU countries and our analysis is concentrated on this.