Measuring inter-dependence between the level of taxation and culture : Evidence from cross-sectional data
2012
Abstract
The idea of welfare state its role are the most important problems economists tried to solve during the last century. However, besides economic welfare, the role of state is influenced by shared cultural values of the population.
This paper evaluates the role of shared cultural values measured by the cultural indexes in explaining the differences in the tax revenues as percentage of GDP on the cross-sectional data from 42 countries. The results suggest that the association between the shared cultural values on one side and the tax revenues as percentage of GDP on the other side is statistically significant.