Influence of Tax Burden on Economic Development of Regions: The Cluster Approach

Typically, if the country's tax system operates at the optimally sound level of taxation, then, along with the execution of the fiscal function, it also stimulates production and entrepreneurial activity in the economic space. The purpose of the article is to reveal the effect of tax burden on the economic growth of the region and to improve the methodological and applied approaches to assessing the optimal tax burden. The concept of the Laffer curve, the fourfactor production function, and the materials of the State Statistics Service of Ukraine became the theoretical, methodological and empirical basis of the research. According to the Laffer concept, the author carried out clusterization of the regions of Ukraine and calculated Laffer points of 1st and 2nd order for different regions of Ukraine. On the basis of these points, the optimal values of the tax burden, which determine the basic patterns of the influence of the region's resource potential on the growth or recession of production, were calculated. It was determined that the economic system of the region is developing in the direction of growth, depending on the achieved technological level of production, investment and natural resources under condition of the tax burden between the Laffer points of 1st and 2nd order. In turn, the technological level of the region is formed depending on the technological level of the generating enterprises of the region and the tax burden on their resources. The using of the toolkit for determining the optimal amount of tax burden on the region's economy by state bodies, will stimulate the production activity of economic entities while preserving the necessary amounts of revenues in the consolidated budget of the regions and the state budget as a whole.