Tax changes have non-linear effects on output, impacting global economies.
Tax changes have a non-linear effect on a country's output, meaning the impact varies based on the initial tax rate. When taxes are low, changing them doesn't affect output much. But as taxes and changes in taxes increase, the effect on output becomes more negative. This has important policy implications for countries with different tax levels, especially for revenue generation and public goods provision. The findings also have implications for debt sustainability analysis and the Laffer curve.