This is a good one.
Econometric analysis of advanced OECD countries for the period 1965-2010 finds that a higher tax to GDP ratio has a statistically significant, negative effect on growth. For example, an increase in the tax to GDP ratio of 10 percentage points is found to lower annual per capita GDP growth by 1.2 percentage points.
He disagrees with this naturally. His refutation contains this quote:
Whether one looks at levels or rates of change, one cannot show any clear negative relationship between social spending and GDP per capita.’
Spot the problem?
Quite. The size of government is not the same as the size of social spending.
One of the points that is often made about the Nordics for example, often by myself it has to be said, is that they are very much neoliberal economies overlaid with large amounts of redistributive taxation. The interference of government in the economy is actually quite a lot lower than that in many other countries which have less of such \”social spending\”.
He\’s refuted a point not being made.