Economic growth is a key indicator of economic performance, and taxation is an important instrument of fiscal policy that influences resource allocation and economic incentives. This study examines the effect of capital gains tax (CGT) on economic growth in 35 OECD member countries over the period 2000 2021, using panel data and the Difference Generalized Method of Moments (Difference GMM) estimator. The sample is restricted to countries with complete and consistent data for the variables included in the analysis. The results reveal a positive and statistically significant relationship between CGT and economic growth, suggesting that capital gains taxation may contribute to economic dynamism and the allocation of financial resources to productive activities. The findings also indicate that lagged economic growth positively affects current growth, highlighting the persistence of economic growth over time. Furthermore, growth in trade openness, financial development, and capital formation has a positive and significant effect on economic growth. In contrast, growth in government consumption expenditure and inflation negatively and significantly affects economic growth. These findings underscore the importance of tax policy and macroeconomic conditions in shaping economic performance. They suggest that an appropriately designed capital gains tax system, alongside policies that promote trade openness, financial development, and capital formation, may support sustainable economic growth. However, the effectiveness of such policies depends on the institutional and economic context in which they are implemented.
Ebrahimi Salari, T. , Ahmadi, Z. and Eshrati, S. (2026). The Effect of Capital Gains Tax on Economic Growth in OECD Countries: Lessons for Developing Economies. Iranian Journal of Economic Studies, 15(2), 383-404. doi: 10.22099/ijes.2026.56096.2119
MLA
Ebrahimi Salari, T. , , Ahmadi, Z. , and Eshrati, S. . "The Effect of Capital Gains Tax on Economic Growth in OECD Countries: Lessons for Developing Economies", Iranian Journal of Economic Studies, 15, 2, 2026, 383-404. doi: 10.22099/ijes.2026.56096.2119
HARVARD
Ebrahimi Salari, T., Ahmadi, Z., Eshrati, S. (2026). 'The Effect of Capital Gains Tax on Economic Growth in OECD Countries: Lessons for Developing Economies', Iranian Journal of Economic Studies, 15(2), pp. 383-404. doi: 10.22099/ijes.2026.56096.2119
CHICAGO
T. Ebrahimi Salari , Z. Ahmadi and S. Eshrati, "The Effect of Capital Gains Tax on Economic Growth in OECD Countries: Lessons for Developing Economies," Iranian Journal of Economic Studies, 15 2 (2026): 383-404, doi: 10.22099/ijes.2026.56096.2119
VANCOUVER
Ebrahimi Salari, T., Ahmadi, Z., Eshrati, S. The Effect of Capital Gains Tax on Economic Growth in OECD Countries: Lessons for Developing Economies. Iranian Journal of Economic Studies, 2026; 15(2): 383-404. doi: 10.22099/ijes.2026.56096.2119
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