The Billionaires Are Getting Nervous
A while ago, I was curious about the relationship between income taxes and growth in the US, so I looked up the data... and I was unable to find <i>any</i> clear relationship!!!<p>As one of many possible examples I could give, below is a table I compiled showing the highest marginal federal income tax rate and year-over-year real GDP growth in the US since 1950. Can you find a relationship?<p>My conclusion, so far: There&#x27;s a tremendous amount of theory, and rhetoric, and posturing, and straw-man arguments... but <i>very little or ZERO actual evidence</i> that national economic growth is impacted one way or another. (In fact, in many cases the data shows higher economic growth during periods of higher taxation at the top of the income distribution.)<p><pre><code>         Highest  Real GDP
  Year  Tax Rate    Change
  1950:    84.4%      8.7%
  1951:    91.0%      8.0%
  1952:    92.0%      4.1%
  1953:    92.0%      4.7%
  1954:    91.0%     -0.6%
  1955:    91.0%      7.1%
  1956:    91.0%      2.1%
  1957:    91.0%      2.1%
  1958:    91.0%     -0.7%
  1959:    91.0%      6.9%
  1960:    91.0%      2.6%
  1961:    91.0%      2.6%
  1962:    91.0%      6.1%
  1963:    91.0%      4.4%
  1964:    77.0%      5.8%
  1965:    70.0%      6.5%
  1966:    70.0%      6.6%
  1967:    70.0%      2.7%
  1968:    75.3%      4.9%
  1969:    77.0%      3.1%
  1970:    71.8%      0.2%
  1971:    70.0%      3.3%
  1972:    70.0%      5.3%
  1973:    70.0%      5.6%
  1974:    70.0%     -0.5%
  1975:    70.0%     -0.2%
  1976:    70.0%      5.4%
  1977:    70.0%      4.6%
  1978:    70.0%      5.5%
  1979:    70.0%      3.2%
  1980:    70.0%     -0.3%
  1981:    69.1%      2.5%
  1982:    50.0%     -1.8%
  1983:    50.0%      4.6%
  1984:    50.0%      7.2%
  1985:    50.0%      4.2%
  1986:    50.0%      3.5%
  1987:    38.5%      3.5%
  1988:    28.0%      4.2%
  1989:    28.0%      3.7%
  1990:    28.0%      1.9%
  1991:    31.0%     -0.1%
  1992:    31.0%      3.5%
  1993:    39.6%      2.8%
  1994:    39.6%      4.0%
  1995:    39.6%      2.7%
  1996:    39.6%      3.8%
  1997:    39.6%      4.4%
  1998:    39.6%      4.5%
  1999:    39.6%      4.8%
  2000:    39.6%      4.1%
  2001:    39.1%      1.0%
  2002:    38.6%      1.7%
  2003:    35.0%      2.9%
  2004:    35.0%      3.8%
  2005:    35.0%      3.5%
  2006:    35.0%      2.9%
  2007:    35.0%      1.9%
  2008:    35.0%     -0.1%
  2009:    35.0%     -2.5%
  2010:    35.0%      2.6%
  2011:    35.0%      1.6%
  2012:    35.0%      2.2%
  2013:    39.6%      1.8%
  2014:    39.6%      2.5%
  2015:    39.6%      2.9%
  2016:    39.6%      1.6%
  2017:    39.6%      2.4%
  2018:    37.0%      2.9%
</code></pre>
Sources:<p>Year-over-year real GDP growth: <a href="https:&#x2F;&#x2F;fred.stlouisfed.org&#x2F;graph&#x2F;?g=pssP" rel="nofollow">https:&#x2F;&#x2F;fred.stlouisfed.org&#x2F;graph&#x2F;?g=pssP</a><p>Tax rates: <a href="https:&#x2F;&#x2F;www.taxpolicycenter.org&#x2F;statistics&#x2F;historical-highest-marginal-income-tax-rates" rel="nofollow">https:&#x2F;&#x2F;www.taxpolicycenter.org&#x2F;statistics&#x2F;historical-highes...</a>