Next time you hear a supply-sider claim that raising taxes on the wealthy is a job- and economy-killer, now you can say with confidence that they are lying.

Using data from irs.gov, census.gov, bea.gov, and bls.gov, I produced the following graphs:

1) Correlation between top marginal tax rates and GDP growth: Graph shows tight correlation between higher taxes and faster growth

2) Correlation between top marginal tax rates and unemployment: Graph shows loose correlation between higher taxes and lower unemployement

3) 10-yr impact to the economy after a change in tax policy: Graph shows that larger tax hikes lead the largest growth whereas larger tax cuts lead to the slowest growth after 10 yrs. (I did this by looking at 10-yr rolling periods and segmenting them by size of tax cut/hike)

To the naysayers out there, if you don't believe my analysis, get the data and run the numbers yourself. I have a double major in math and physics so I am very confident in my conclusions.

The spreadsheet I used to create these graphics is interactive so if anyone would like to see the impact of a specific tax change, just let me know.

Images

Empirical evidence that higher taxes on the wealthy lead to lower unemployement and greater economic growth
Empirical evidence that higher taxes on the wealthy lead to lower unemployement and greater economic growth
Empirical evidence that higher taxes on the wealthy lead to lower unemployement and greater economic growth

Comments

CV Rick's picture
CV Rick 3 years 51 weeks ago
#1

I would certainly like access to the spreadsheet so I can play with the numbers myself.

mauiman58's picture
mauiman58 2 years 45 weeks ago
#2

So let's carry out your theroy all the way and tax everyone 100 percent? That way we could all could use the Barak Obama short form for our taxes.

Line one- How much money did you make?

Line two- Send it in!

mabo1's picture
mabo1 2 years 18 weeks ago
#3

Could I please get the data. The conclusion is intuitive, but it seems more likely to me that recessions cause tax cuts (which are ineffective), than the idea that tax cuts cause recessions.

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