NC Budget and Tax Center

Tax Cuts a Poor Strategy for Growth

Some members of General Assembly have repeatedly claimed that elimination or deep cuts to personal income tax rates, especially on high-wealth individuals can solve our high unemployment and sluggish economic growth.

New research from the Center on Budget and Policy Priorities released this morning finds that pursuit of such policies are not worth the risk.

After comparing the economic performance of those states that pursued deep cuts in the 1990s and 2000s and those that did not, it turns out high tax cut states have grown far slower. Read the full report for details.

 

9 Comments

  1. david esmay

    March 21, 2013 at 11:46 am

    FedEx founder, chairman and ceo Fred Smith called this economic philosophy exactly what it is, Republican mythology.www.huffingtonpost.com/2012/12/05/top-two-percent-tax_n_2245596.html

  2. david esmay

    March 21, 2013 at 11:46 am

  3. Doug

    March 21, 2013 at 1:59 pm

    I guess we need to take 100% of income and assets from everyone. That way we can grow like gangbusters. I know the Soviet Union is a wonderful prosperous state that is a world leader in 2013, so we need to follow their lead since that is their core belief put into action.

  4. Doug

    March 21, 2013 at 1:59 pm

    Oh, wait….I just googled Soviet Union. Seems they went toes up in the early 1990′s. Uh oh! Guess government confiscation may not work after all.

  5. Allan Freyer

    March 21, 2013 at 2:08 pm

    Doug, as always, thanks for chiming in, but you might want to actually read the post before commenting. No-one is talking about increasing the top marginal rate for the state income tax to 100%.

    The report cited in the post examines the economic impact of *cutting* state personal income taxes, and (unsurprisingly) found that they do not produce the miracle of economic growth that is often promised.

    And since there is clearly a world of difference between the status quo personal income tax rates (top rate = 7.75% for incomes over 1 mil) and a 100% tax, I’m not entirely sure what point you’re trying to make.

  6. Doug

    March 21, 2013 at 2:45 pm

    You clearly cannot understand sarcasm. I am making the opposide argument, that raising taxes stimulates growth when that is clearly not the case. If you feel my argument does not make sense, then the opposite would (and actually is) be true as well. My true point is, government does not create growth but in fact impedes or destroys growth. In almost every case it only re-distrubutes funds to less efficient purposes, think Solyndra…or welfare transfers.

  7. gregflynn

    March 21, 2013 at 5:16 pm

    Yeah, why can’t government be more like business, like Enron, Worldcomm, or Nortel? I prefer the old Doug. This new Doug sounds like he just read ahead in a 3rd grade social studies book. Some of us don’t have to Google the 90′s, because we were there at the time. Back then we had Telnet, but you don’t want to hear about how the government funded research started the internet.

  8. Doug

    March 23, 2013 at 12:47 pm

    Wait….didn’t Al Gore start the internet?

  9. Doug

    March 23, 2013 at 12:50 pm

    greg,
    So you should know all about what I am speaking of. The USSR collapsed by going down the path the US is taking. Glad you remember and agree. So do I by the way, but some of the people on this blog may not know….or more likely have selective memory and don’t care to recognize that progressivism has such a dark side.