This paper investigates the effects of changes in taxes on economic growth. Using annual data from 1965 to 2003 for a panel of nineteen european economies, the results show that the effect of an increase in taxes on real GDP per capita is negative and persistent: an increase in the total tax rate (measured as the total tax ratio to GDP) by 1% of GDP has a long-run effect on real GDP per capita of -0.5% to -1%. The findings also imply that increases in social security contributions or taxes on goods and services have larger negative effects on per capita output thanincreases in income tax.