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Scholars Agree: High Tax Rates Do Harm Growth

Home - by - January 28, 2013 - 16:15 America/New_York - 10 Comments

The Foundry

The Congressional Research Service (CRS) stirred controversy last year when it released a study claiming that tax rates do not influence economic growth. Predictably, those who favor higher taxes used the flimsy report to bolster their backward argument that raising tax rates, as Congress and President Obama did with the fiscal cliff deal, would not further slow our economy.

The CRS report was not based on robust statistical analysis, but on simple correlations that reveal little about the impact of tax rates on the economy. The weakness of the CRS report brought well-deserved criticism.

CRS pulled the report after the controversy but subsequently re-released it with minor changes.

In December, in response to the controversy regarding the CRS report, William McBride of the Tax Foundation published a review of the scholarly literature on taxation and economic growth. McBride reported that the empirical work of economists agrees overwhelmingly that higher tax rates slow economic growth and he concludes that “the U.S. tax system is a drag on the economy.”



  1. Pickled Liver

    January 28th, 2013

    It is truly amazing how truth and/or empirical data has little, if any, influence on this administration.

    Just make it so ~ ! By the time people get around to finding out the “study” was bullshit we’ll have passed what we needed! Kind of like having a Kenyan as President ~! Someday to be proven the US has fallen victim to the biggest hoax in history ~!!!

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  2. BILL

    January 28th, 2013

    “the empirical work of economists agrees overwhelmingly that higher tax rates slow economic growth”

    oh boy, I must be a scholar, because I already knew this a long time ago.

    takes the gifted a while to catch up eh?

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  3. eternal cracker p

    January 28th, 2013

    I don’t have a job because any additional income I can bring my family would be first taxed away and second spent away on day care for our children. Sure, we might be able to save up a few thousand extra per year, but it comes at a cost of never seeing each other and having someone else raise our kids. It’s not worth it to any of us. Fortunately, we understand a budget and how to live within our means. Our government doesn’t understand the impact taxes have on the economy, nor should they, as they don’t understand simple budgets or means in which to live by.

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  4. Carlos The Jackal

    January 28th, 2013

    Probably the scholars who are the adjunct profs. that just got their hours cut by the university due to obamacare. Do you think those scholars understand the irony here?

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  5. Billy Fuster

    January 28th, 2013

    Soon we will be hearing, “Economists Agree: Obama is a socialist.” There is a difference between knowledge and wisdom. The “unwashed” and “uneducated” Bubbas of this country have been aware of what’s been going on for a long time.

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  6. jeckelmyhyde

    January 28th, 2013

    You don’t have to be a rocket scientist to know that taxes and bureaucracy only add to the cost of doing business. When either or both increase, profits go down.

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  7. Tim

    January 28th, 2013


    The socialists believe that money isn’t necessary and taxation is simply the first step in redistribution (to themselves, mainly).

    Obama wants EVERYONE dependent solely on the state.
    He wants to rule as Stalin and Hitler did – by a combination of propaganda, terror, and controlling all commodities and resources. If he can keep every American just 3 days from starvation (as in Cuba and North Korea) the peasants will be docile.

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  8. Dan Ryan Galt

    January 28th, 2013

    If it took them this long to figure it out, I be thinkin them Scholars need to demand their money back from whatever university they attended.

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  9. Wraith

    January 28th, 2013

    In other news, the sun is really really hot.

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  10. Mary Jane Anklestraps

    January 28th, 2013

    Skolarrs r smrat. Duh.

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