This paper develops an endogenous growth model with imperfect competition in intermediate good markets to analyze the effects of taxes, government spendings and the degree of competition in intermediate good market on employment, economic growth and income distribution. Regardless of the increasing returns of the variety, we find that a decrease in the labor income tax or the consumption tax and an increase in the government spendings raise the employment and economic growth rate, however, they have ambiguous effects on income inequality. In contrast, an increase in the capital tax will reduce the employment and economic growth rate, but it decreases income inequality. In the case with no considering the increasing returns of the variety, an intensive competition intermediate good markets will have positive effects on employment and economic growth rate however they have ambiguous effects on income inequality. In the case with considering the increasing returns of the variety, the degree of competition in intermediate good markets has ambiguous effects on employment or the economic growth rate and income inequality.