Income and consumption taxes as automatic stabilizers: Comparison of various OECD countries and Turkey

In this study, aimed that to evaluate and compare the built-in flexibility of the major income and consumption taxes as a fiscal policy tool that levied in Turkey and United States of the America, United Kingdom and Italy. In the first section, first of all, the emergence and development of fiscal policy will be discussed and why the discretionary policies emerged in the historical process will be explained, and the generally accepted aims of fiscal policy such as achieving economic stability, realizing economic development and growth, and regulating the distribution of income and wealth will be discussed. In the following of the section, discretionary and non-discretionary policy instruments will be explained and the factors that determine the effectiveness of non-discretionary policy instruments will be discussed. In the second section, income and consumption tax that in force and currently in practice in Turkey (Income Tax, Corporation Tax, Value Added Tax and Excise Tax) will be considered as automatic stabilizers. In the third and final section, firstly, OECD's organization, structure, objectives, member countries and the OECD-Turkey relations will be discussed. The income and excise taxes currently in force in the United States, the United Kingdom, and Italy, (which are selected for our study and also OECD countries) will be explained, and will be considered as automatic stabilizers especialy for the 2008 Global Finance Crisis period. Finally, taxes applied in Turkey will be compared with the taxes that applied in these countries will be compared; the applicability of automatic stabilizing fiscal policy will be discussed with the help of the obtained facts.