impact of fiscal policy to income distribution and economic growth 1973-2003

In recent years discussion about the role of government in economic has been the center of attention. One of the most important duties of the government for attaining economic growth is her distributive role. In this paper, it is attempted to pinpoint this role through fiscal policies and the important tools available to government for achieving this goal are the Transfer payment and Taxes which have been discussed, through using time series data,and the method used for this paper is the simultaneous equation system And the effect of fiscal policies (taxes and subsidies) on income distribution and economic growth is analyzed. from 1973-2003 The finding of this paper shows that fiscal policies of the country (increase of taxes and subsidies) has caused more equitable distribution of income and reduction of economic growth. The index of evaluation of better distribution of income is the Ginni coefficient. the data used for this paper have been collected from various publication of Central Bank of Iran. Increase in oil revenues and GDP have been a good reason for more equitable distribution of income and more growth of the economy CLASSIFICATION OF JEL; F43,E62,D63