| Abstract [eng] |
80 pages, 17 tables, 20 pictures, 65 references. Goal of this master thesis is to quantify the effect of labor force and capital gains taxation to economic growth of nations in European Union between years 2007-2020. Master thesis consists of four parts, first three of them are based on the goals set for this thesis: 1) scientific literature and research was analysed and systematised, methods of analysis and synthesis were used 2) methodology for master thesis was prepared 3) comparative and dynamic analyses were conducted for labor force and capital gains taxation, grouping, comparison and graphic representation was used 4) the effect of labor force and capital gains taxation on the economies of EU countries was evaluated using Granger causality test, correlation analysis and regression analysis. Recommendations can be found at the end of conclusion of this master thesis. In theoretical part of the thesis, it became known that scientists disagree on how labor force and capital gains should be taxed. Majority of them agrees that heavy labor force and capital gains taxation leads to increased black market activity, less investments and higher unemployment. All of these factors slow the economic growth. The comparative and dynamic analyses, conducted in this thesis showed that the rates of taxation on labor force and capital gains did not show signs of increasing of decreasing significantly throughout the analysed period. Majority if the countries did not change the taxation rate for a number of years, only a handful of countries stood out with more drastic changes. Having analysed, the income generated by these taxes a conclusion was made that the income generated by labor force taxation is more stable and country has an easier time of forecasting this income, which is then used in running the country. Moreover, having grouped the EU countries by standard of living into three groups it became clear the highest rates of taxation on labor force and capital gains are in the countries where the standard of living is the highest, the first group of countries, and the rates are lowest in countries where the standard of living is the lowest, third group of countries. Results of Granger causality test showed that in the majority of groups, there is no causal relationship between analysed factors. Correlation analysis has shown that is a strong positive relation between chosen variables, which means that they are good to use in the model, thus a regression analysis was done. Results showed that the income generated by labor force and capital gains taxation has a positive impact on the growth of economy. It was also observed that even in some EU countries the taxation rates on labor force and capitals gains are quite high, they not slow down the growth of economy but also have a positive impact. Governments use the income generated by this taxation for covering losses, social benefits, culture, education and other crucial areas which impact the growth of the economy. Recommendations can be found at the end of conclusion of this master thesis. |
