February 06, 2007

 

Debunking Anti-Tax Myths

Conservatives have done a masterful job getting their talking points entrenched in the public discussion about government effectiveness, taxes and public investment. But there is ample research that undercuts their anti-government story. Check out these sources and you will never have to suffer through a “tax cuts grow the economy” diatribe again. Tax Cut Myths. The Center on Budget and Policy Priorities debunks eight myths about taxes you probably know by heart. No. 1: “Tax cuts pay for themselves”… State Personal Income Taxes and Economic Growth. The Institute on Taxation and Economic Policy counters a Cato Institute study and finds that higher personal income taxes do not preclude a strong economy. Look for the chart that shows high-income tax states outgrew low-income tax states. That’s right, Minnesota was among the leaders. Tax-cutting States Still Don’t Prosper. A more recent study shows states that cut taxes sharply during the 1990s have lagged behind during the 2001-06 recovery. And yes, now Minnesota’s one of the laggards. Anti-investment Policies Hurt Kids. “Homeland Insecurity… American Children at Risk” documents how 9 out of 10 states with the best outcomes for children are “Blue” states with higher taxes. The 10 worst performing states are “Red” states that invest less in children, with corresponding results. High Income Taxes Don't Drive Away High Earners. Evidence of tax flight is mixed at best. Growth & Justice studied state-to-state migration data and found tax rates don’t appear to be a major factor in why people leave the state. It turns out mountains and warm weather are the real income magnets. – Charlie Quimby, Growth & Justice Communications Fellow

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