Tax Hikes, Economic Clouds, and Silver Linings: A Review of Deficits and the Economy

Publication Date: February 2008

Publisher: Heritage Foundation (Washington, D.C.)

Author(s): JD Foster

Research Area: Banking and finance; Economics

Keywords: Taxes; tax increase; entitlement spending; higher taxes

Type: Report

Coverage: United States

Abstract:

Recent empirical work using different approaches affirms the traditional view that there is a clear and robust relationship between lower taxes and higher economic output. Federal, state, and local policymakers should therefore look for every opportunity to reduce taxes, especially those that are most harmful to economic growth such as marginal tax rates and taxes on saving and investment.