The Effect of Taxation on Economic Development

Abstract The main driver of modern economic growth is taxation. Its importance stems from both the fact that it is by far the most significant of all revenues and the seriousness of the issues the current system's high tax burden has brought about. Taxation is imposed by a central or local government as a levy on a person or corporation to pay for its expenditures and carry out its fiscal policy. Thus, the state can use taxation to redirect money from private consumption to public investment (Greene, 2011).