Posted on 10/30/2017 2:21:45 PM PDT by SeekAndFind
Many lawmakers in Congress and in statehouses around the country peddle the same supply-side theory about income taxes: the lower the tax, the more the economy will grow. But new research from the Institute on Taxation and Economic Policy reveals this economic approach is failing to deliver in the states. In fact, states with higher income taxes outperformed states with no income tax.
My colleagues and I compared the economic track record of the states that have charted the most radically different courses with their income tax policies, or lack thereof. Specifically, we examined economic growth in the nine states with the highest top income tax rates (averaging 10%), and the nine states with no broad-based personal income tax. What we found undermines claims that income taxes are a drag on growth that must be reduced or eliminated.
Over the last decade, states with the highest top tax rates saw their economies grow by 25.8% on a per-person basis, while those states without income taxes saw growth of just 17.4%. This growth isn’t just about numbers in a spreadsheet or bragging rights. It has translated into an improved quality of life for the residents of states with higher income tax rates. Over this same period, residents of those states saw more rapid growth in take-home pay (disposable personal income per person) and their job prospects, as measured by the official unemployment rate and the ratio of people in their prime working years who have managed to land a job.
To be clear, these types of cross-state comparisons don’t prove that higher income taxes are causing faster growth in the states that have embraced them. But they do cast serious doubt on claims that lowering income taxes is a surefire way to grow the economy.
(Excerpt) Read more at fortune.com ...
Author observes:
States without income taxes also tend to rely more heavily on sales and excise taxes, which fall disproportionately on moderate-income families. Balancing the budget on the backs of families who lack a stable financial footing is unsustainable in the long run, and it runs the risk of dampening consumer spending that fuels so much of our nation’s economy.
The only thing that MIGHT be different is schools. When I was in Maryland, the schools were the best in the country, but I still sent my 4 kids to Catholic School. When we moved to Florida, holy cow the schools stink, but I still sent the kids to Catholic School so it doesn’t matter.
That is what you have to do every time you pay your taxes.
Yeah - the Obama administration was pouring money in to the states that supported him.
The economy didn’t grow because they raised taxes.
The economy grew because your Congress and President were picking winners and losers.
Thanks for the money btw. :)
Is “bogosity” a word?
It’s the property tax that takes the biggest bite and hampers growth.
The people doing all the relocating to red states disagree.
If it ain’t it oughta be.
Q for the author of this swill: Really? Then why in HADES has NYS been hemorrhaging House seats for DECADES?!
This makes perfect sense. To take the argument to its logical conclusion, all the states should have income tax rates of at least 80% or maybe even 100%. That way we can really get those economies moving.
Political stance
ITEP’s quantitative analyses are utilized by observers from across the political spectrum and by analysts within government.
ITEP, as well as the associated Citizens for Tax Justice, has been characterized as liberal.
That’s pretty mild a description.
All you have to do is a simple web search for the outfit and see who quotes these folks the most.
(Hint - it is not conservatives)
It’s BS but if it means more people stay in NY, Ill and CA, go right ahead and believe it.
They’re not stayin’ in NYS....
Good deal. Now just remove the deductibility of those high tax liberal puke states and they will be tax heaven!
Texas and Florida are underachieving?? I doubt it.
More tariffs and less income taxes.
The ITEP is a liberal organization, so of course it would attack supply-side economics and promote higher taxes.
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