Wpływ podatków i kapitału ludzkiego na wzrost gospodarczy na przykładzie Polski
The Effect of Taxation and Human Capital on Economic Growth in Poland

Summary/Abstract: The author analyzes – with help of an econometric model – the relationship between tax rates and private and public expenditure on education and the GDP growth rate in the long run. He proves that income and consumption taxes hamper economic growth and the negative effect of taxation in stronger in case of consumption (expenditure) taxes. Using data on the Polish economy for the period 2000-2011, he proves that economic growth in Poland over the period was mainly based on a rapid increase in human capital (at a rate of 5% per year), with a less significance of capital accumulation (which rose 2,7% a year). Next, the author presents some simulations showing the probable effects of the reduction of various tax rates. Cutting the main tax rates by 5 p.p. would increase the GDP growth rate by 0.3 p.p., which could result in a GDP level higher by 9% after 50 years; this would be tantamount to the reduction of the tax burden imposed on the economy from 33% of GDP at present to 26% of GDP in the future. A considerable acceleration of economic growth can also be achieved with the current amount of total tax revenue, by changing the structure of taxation, i.e. by increasing expenditure taxes and decreasing income taxes. Of crucial importance for the rate of economic growth is the level of investment outlays for human capital (expenditure on education). A permanent increase in educational spending by 1% of GDP would give a similar growth effect as the decrease in all taxes by 5 p.p.: the GDP growth rate would rise by ca. 0.3 p.p. It is not so important whether the additional funds spent on education come from reducing public consumption or from cutting private consumption.

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