Taxes and Economic Growth
High taxes massively lower the rate of economic growth, lower effective after-tax wages,
and thus the wealth of people. The longer governments place high tax burdens on their
population the higher are the losses in wealth.
This recent study from December2009 by Professor Richard K. Vedder and Jonathan Robe
delivers ample evidence, that high taxes are not only in theory significantly negatively
correlated with economic growth (e. g. as illustrated in the Laffer curve). Rather, comparing
the States with high tax burdens and the States with low tax burdens in the United States and
also the high tax states and the low tax states of the OECD countries this study proves this
strong negative correlation.
Interview Glasshouse with Prof Vedder