Cycles of economic activity can have significant effects on public fiscal balances by affecting tax revenues. While increases in tax revenues during periods of rapid growth will close budget deficits, a decline in tax revenues during periods of contraction will cause a deteriorationin the budget balance. In this context, the direction and dimension of the relationship of tax revenues to economic cycles, in other words, the sensitivity of tax revenues to economic cycles has a decisive importance in budget performance. Which is usually the case for budget deficit financing, such as Turkey and this in a country which directly dependent on the short-term collection facilities located in tax revenues, is of great importance in this role. Otherwise, higher borrowings will be required Budget revenue and spending items vary fundamentally depending on economic cycles and discretion decisions of public authorities. In most public spending, the discretionary decision component weighs more, while in revenues, economic cycles are more decisive. In general, it is known that economic cycles do not affect all tax sources at the same rate, and that some tax items are more sensitive to changes in economic activity. These considerations will be compared with other OECD countries in the study.
Tax, budget, Public Administration, OECD
|Author :||Ali BİRVURAL|
|Number of pages:||140-147|