Wednesday, May 9, 2012

A Nice Paper on Taxes and Economic Growth

I came across a link at the Monkey Cage to a paper exploring the correlation between taxes and economic growth on both a theoretical and a factual level. As I've pointed out on my blog before, the case for lower taxes leading to higher economic growth is rather weak, both from a theoretical and empirical standpoint. As the paper points out, there remain other arguments in favor of low taxes, but the evidence is becoming increasingly strong that higher economic growth is not one of these reasons.

I'll have more to say on some related topics later, this paper points in the direction of a few tax topics worth greater discussion.