The economic growth and taxes are very important aspects in the development of any economy. This research analyses the tax rate that optimize economic growth in Kenya. The specific objectives of the study were to: To establish the effect of tax rate on economic growth in Kenya and to determine the tax rate that maximizes economic growth. This study adopts the Scully model and a balanced budget approach that is revenue being equal to expenditure using time series data from the period 1990 to 2013. Sources of data were Kenya National Bureau of Statistics (Economic Survey) and the world development indicators of the World Bank. The theoretical background and some major empirical as well as the
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