Pay no attention to Republican talking points – incomes taxes actually stimulate economic growth. A study just released by the Institute on Taxation and Economic Policy found that over the last ten years the states with the highest income tax rates economically outperformed states with no income taxes at all.
As Bloomberg News reported on the study, “The nine states with the highest personal income taxes on residents outperformed or kept pace on average with the nine that don’t tax their residents’ incomes.” While median household income has declined across the nation as a result of the Bush Great Recession, income drops have been substantially lower in states with high income tax rates.
On average, high-rate states saw a .7% drop in median household income, but states with no income tax saw a much larger 3.5% drop in household incomes. Progressive income taxes are a very important part of a balanced economy and a healthy middle class. Time to roll back the Reagan tax cuts – and make the Romney super-rich pay their fair share again. It’ll be good for the economy!