Evaluating State and Local Business Tax Incentives [pdf]
The same appears to be true for individual income taxes too.<p>I&#x27;ve looked at the income taxes versus growth in the US... and I&#x27;ve been unable to find any obvious relationship. As one of many possible examples, below is a table showing the highest marginal federal income tax rate and year-over-year real GDP growth in the US since 1950.<p>My conclusion, so far: There&#x27;s a tremendous amount of theory, and rhetoric, and posturing, and straw-man arguments... but very little or ZERO actual evidence that national economic growth is impacted one way or another. If anything, the data seems to show <i>higher economic growth during periods of higher taxation</i>!<p><pre><code>         Highest   US Real
  Year  Tax Rate   GDP Chg
  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>