The impact of sales tax on economic growth in the United States: an ARDL bounds testing approach

Abstract

This article investigates the impact of sales tax on economic growth in the United States during the 1960–2013 period using the autoregressive distributed lag bounds testing approach of cointegration. We estimate the long- and short-run elastic coefficients of sales tax on growth and find that economic growth in the United States responds negatively to sales tax in the long run, although it produces positive effects in the short run.