In it, but not of it. TPM DC

Tax Cuts For The Rich Do Not Spur Economic Growth: Study


The study delves into the last 65 years of U.S. tax policy pertaining to high earning Americans -- including top marginal rates on income and capital gains taxes -- and how it impacts their decision-making. The conclusion: cutting effective taxes on the rich doesn't boost economic growth, but it does correlate with rising income inequality.

"Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The real GDP growth rate averaged 4.2% and real per capita GDP increased annually by 2.4% in the 1950s. In the 2000s, the average real GDP growth rate was 1.7% and real per capita GDP increased annually by less than 1%," wrote Thomas L. Hungerford, CRS' specialist in public finance and author of the report.