The Relationship Between Taxes and Growth at the State Level: New Evidence
Year: 2015
Type: article
Abstract: The effects of state tax policy on economic growth, entrepreneur ship, and employment remain controversial. Using a framework that in prior research generated significant, negative, and robust effects of taxes on growth, we find that neither tax revenues nor top income tax rates bear stable relationships to economic growth or employment across states and over time. While the rate of firm formation is negatively affected by top income tax rates, the effects are small in economic terms. Our results are inconsistent with the view that cuts in top state income tax rates will automatically or necessarily generate growth.
Source: National Tax Journal
Authors: William G. Gale, Aaron Krupkin, Kim Rueben
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2581366898