Taxation is one of the sources of revenue for the federal government, hence, we need to examine the extent and the percentage of what the PAYE is contributing to the growth of the economy in terms of GDP.
Income Tax. When you earned the money, by deducting all your expenses in the process of business transactions is called Income. So, that income should be charged for taxation.
To analyze the effect of income taxation on the growth of the economy, it is probably best to use a dynamic general-equilibrium growth model with either infinitely-lived households or overlapping-generations households. The (negative) effect of income taxation would depend on not only how it is installed (progressive, flat, etc.) but also how the revenue from it is spent (cash transfers, public services, public investments, etc.), however.
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