History Shows Higher Tax Rates Do Not Produce More Tax Revenue

Wall St. Journal:  “Tax revenues as a share of GDP have averaged just under 19%, whether tax rates are cut or raised. Better to cut rates and get 19% of a larger pie.  Even amoebas learn by trial and error, but some economists and politicians do not.  The Obama administration’s budget projections claim that raising taxes on the top 2% of taxpayers, those individuals earning more than $200,000 and couples earning $250,000 or more, will increase revenues to the U.S. Treasury. The empirical evidence suggests otherwise. None of the personal income tax or capital gains tax increases enacted in the post-World War II period has raised the projected tax revenues.

Federal Tax Rates & Revenue

45 States Collect 8.9% Less Taxes

According to the Tax Foundation’s article called “State Revenue Changes from 2008 to 2009,” 45 states collected an average of 8.9% less in taxes in 2009 than in 2008.  Here are the top 16 tax revenue losing states:

  1. Alaska: 51.9%
  2. Arizona: 19.7%
  3. South Carolina: 16.8%
  4. New Mixico: 15.1%
  5. California: 15.0%
  6. Idaho: 14.1%
  7. Virginia: 12.8%
  8. Connecticut: 12.1%
  9. New Jersey: 11.9%
  10. Utah: 11.9%
  11. Georgia: 11.7%
  12. Massacusetts: 11.7%
  13. Florida: 11.5%
  14. North Carolina: 10.6%
  15. Colorado: 10.3%
  16. Tennessee: 10.0%
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