Daily Scoop Xtra: States Lacking Income Tax Get No Boost in Growth


In the wake of the Norquist “No Tax” Pledge, the gridlock caused in Congress over raising taxes in any form and attempts by many Republican-controlled state legislatures to further reduce state taxes to spur growth, a new study finds how misguided supply-side economics is during times of economic recovery.

BLOOMBERG- Governors seeking to expand their economies by eliminating income taxes find little support for the idea in the record of U.S. states that lack such a levy.

The BGOV Barometer shows the nine states with the highest personal income taxes on residents outperformed or kept pace on average with the nine that don’t tax their residents’ incomes, according to a study of economic output, unemployment and household income by the nonpartisan Institute on Taxation andEconomic Policy.

The findings show cutting state income taxes to stimulate growth relies on “flawed analysis” based on the theories of economist Arthur Laffer, said Carl Davis, a senior analyst at ITEP in Washington and author of the report. Laffer’s work was cited by Republican Governors Sam Brownback of Kansas and Mary Fallin of Oklahoma as a reason to cut income taxes as a way to stimulate job growth and attract business.

“Being low-tax doesn’t generate economic competitiveness or long-term economic viability,” said Ralph Martire, executive director at the nonpartisan Center for Tax and Budget Accountability in Chicago.

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2 Comments to “Daily Scoop Xtra: States Lacking Income Tax Get No Boost in Growth”

  1. Of course, it’s not about generating economic competitiveness or long-term economic viability. It’s about ideology and crippling the government at any cost…

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