På Lafferkurvans Sluttning - En ekonometrisk studie av vilken den pekuniära effekten är av förändringar i svenska kommuners skattesatser

Abstract

Using comprehensive data from 286 municipalities in Sweden, attention is focused on examining the connection between tax rates and public revenues. By means of a quadratic model adjusted to control for fixed effects, an attempt is made to estimate the Laffer curve and to asses if the recent decades’ increases in tax rates has brought Sweden to the slippery slope side of the curve. The findings confirm that, during the years 1992-2015, the bell-shaped curve is statistically significant and the maximizing tax rate is 31.38 percent. The study does not find any evidence of reverse causality. On the contrary, support for such a reverse relationship is found to be highly improbable. Thus, the study presents evidence that some increases in tax rates in Swedish municipalities throughout the recent decades has probably caused diminishing public revenues. Provided that tax rate hikes were prompted by the intention of increasing public revenues, the implication for public policy, hence, is that many municipalities have, indeed, had counterproductive tax rate levels. A reduction could therefore lighten the tax burden on the productive part of the economy, and at the same time possibly strengthen the financial state of the government.