Skip to main content
  • Experts
  • Events
  • Briefing Book
  • Resources
  • About
  • Contact
  • Support
  • Fiscal Facts
Twitter
Facebook
Logo Site
  • Topics
    • Individual Taxes
    • Business Taxes
    • Federal Budget and Economy
    • State and Local Issues
    • Campaigns, Proposals, and Reforms
  • TaxVox Blog
  • Research & Commentary
  • Laws & Proposals
  • Model Estimates
  • Statistics
  • Features
Research report

The Relationship Between Taxes and Growth at the State Level: New Evidence

William G. Gale, Kim S. Rueben, Aaron Krupkin
December 1, 2015
Download PDFPrint
Share

Primary tasks

  • Overview(active tab)
  • Full Report
  • Media Mentions

Abstract

The effects of state tax policy on economic growth, entrepreneurship, and employment remain controversial. Using a framework that in prior research generated significant, negative, and robust effects of taxes on growth, we find that neither tax revenues nor top income tax rates bear stable relations to economic growth or employment across states and over time. While the rate of firm formation is negatively affected by top income tax rates, the effects are small in economic terms. Our results are inconsistent with the view that cuts in top state income tax rates will automatically or necessarily generate growth.

Research Area

State and Local Issues State and local taxes
To reuse content from the Tax Policy Center, visit copyright.com, search for the publications, choose from a list of licenses, and complete the transaction.

Meet the Experts

  • William G. Gale
    Codirector
  • Kim S. Rueben
    Sol Price Fellow
  • Aaron Krupkin
Research report

New Evidence on The Effect of The TCJA On the Housing Market

Robert McClelland, Livia Mucciolo, Safia Sayed
March 30, 2022
  • Donate Today
  • Topics
  • TaxVox Blog
  • Research & Commentary
  • Laws & Proposals
  • Model Estimates
  • Statistics
  • Privacy Policy
  • Newsletters
Twitter
Facebook
  • © Urban Institute, Brookings Institution, and individual authors, 2022.