Impuestos, crecimiento económico y bienestar en Colombia (1970-1999)

Estimating the macroeconomic implications of tax policy can be extremely cumbersome, especially in developing countries, which exhibit complex and frequently reformed tax systems. Nonetheless, the theoretical importance of taxation is well recognized: by distorting economic decisions, tax policy can affect the allocation of resources, and thereby welfare and growth. In this paper, we follow the method outlined in Mendoza, Razin and Sadka (1994) in order to compute aggregate tax rates on factor incomes and consumption for the Colombian economy in the period 1970-1999. Besides from providing an aggregate description of the evolution of tax policy, these average effective tax rates are used to estimate the growth and welfare costs of taxation in a simple, perfect foresight, dynamic general equilibrium model. Results indicate that tax policy has imposed increasing and significant efficiency loses in Colombia, especially during the late nineties. Although growth costs have also increased throughout the whole period, the impact of changing tax policy on growth is quantitatively insignificant for most specifications. Indeed, only in the late nineties, and when economic growth is driven by a learning by doing externality stemming from investment activities, do the growth costs of tax policy become significant.