Tax Rate Effect on Economic Variables Selected in General Policies of Resistance Economy Framework

The neoclassic development model is known as a macro-economic tool and public finance. This study, considering the general policies of resistance economy, aimed to design a neoclassic development model based on different tax shocks to analyze the relationship between tax rates and some macro-variables. The study simulates the immediate reactions of some economic variables to tax shocks (income tax of companies, income tax, and consumption tax). All the data are extracted from the fixed prices in 2011 and the annual ones from 1971 to 2020. After the logarithm taken from the variables through Headrick-Prescot, all the variables were processed. The linear random equation, were analyzed through Ohlig (1999) approach in Matlab program. Finally, the parameters were pinpointed from the literature, and the simulated variables were compared with the real data to test out the validity of the model. The findings showed that the decrease in tax income rates and the company income taxes would result in the price reduction of shares and the increase of consumption, production, and labor demand. Also, the increase in the consumption tax rate would result in the increase in share prices and reduction of consumption, production, and labor demand.