Effects of flat tax reforms on economic growth in the OECD countries
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- Master Thesis 
This master thesis explores how a transition from progressive tax schemes to flat tax schemes in OECD countries affects economic growth in terms of output, focusing on the period from 1997 to 2007. I present and compare academic and empirical evidence on the relation between taxation and economic growth in order to estimate the most probable effect on the economy of implementing flat tax schemes in the OECD countries. A meta-regression analysis on 18 calibration articles on the subjects of tax reforms provides robust results of the mean tax elasticity from the studies, and also the transformation into long run growth is robust. The average growth potential is summarized to 6.75 percent, translating into a growth potential of 9.16 percent in real output for the OECD area based on the 2006/2007 level of tax progressivity and tax elasticity. Controlling for estimation bias in parameter coefficients and prediction model, the conclusions remain robust.