We investigate the relation between changes in tax composition and long-run economic growth using a new dataset covering a broad cross-section of countries with different income levels. We specifically consider 69 countries with at least 20 years of observations on total tax revenue during the period 1970-2009-21 highincome, 23 middle-income and 25 low-income countries. To our knowledge this is the most comprehensive and up-to-date dataset on tax composition and growth. We find that increasing income taxes while reducing consumption and property taxes is associated with slower growth over the long run. We also find that: (1) among income taxes, social security contributions and personal income taxes have a stronger negative association with growth than corporate income taxes; (2) a shift from income taxes to property taxes has a strong positive association with growth; and (3) a reduction in income taxes while increasing value added and sales taxes is also associated with faster growth.

We investigate how changes in the composition of tax revenue affect long‐run growth in a broad cross‐section of countries. To do this, we construct a new dataset that covers 70 countries (23 high‐, 23 middle‐ and 24 low‐income countries), with at least 20 years of observations during the period 1970–2009. In the context of revenue‐neutral reallocations, we find that increasing consumption and property taxes while reducing income taxes boosts long‐term growth. Among income taxes, we find that social security contributions and personal income taxes tend to have a stronger negative association with growth relative to corporate income taxes. Results, however, depend on countries' development levels, suggesting nonlinearities in the relation between taxes and growth even after controlling for convergence effects. Although results are robust for high‐ and middle‐income countries, these are generally not significant for low‐income countries.

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