THE ROLE OF TAXES IN THEORIES OF ECONOMIC GROWTH AND DEVELOPMENT

Abstract

Taxes, which have an important place in the economy, have the ability to seriously affect the country's economy with a number of functions. This article discusses taxes, theories of taxation, and the role of taxes in theories of economic growth and development. The article reflects the views of A. Smith's classical taxation theory, C. M. Keynes' theory, and M. Friedman's monetarism, A. Laffer's theory of supply economy, which are representatives of the neoclassical theory. The main purpose of all mentioned theories and various views of economists have been explained. The role and functions of taxes in the policy of each of them were investigated and different results were obtained. After information on taxes and tax theories, various types of economic growth and development theories were discussed and were mentioned the existence of taxes and the nature of their impact on the growth rate in each theory. These are the Harrod-Domar development model developed by R. Harrod and E. Domar, the neoclassical growth model of R. Solow, the F. Knight model, and J. Heckman, R. King, S. Rebelo, and R. E. Lucas, who provided information on development models based on human capital. The common denominator is that the only goal of all these theories is, of course, to achieve economic growth. However, the impact of taxes has given different results because the ideas are different in each of them and the mechanisms used to increase the growth rate are different. Keywords: taxes, taxation theories, theories of economic growth and development