Taxes and Economic Growth
Table of Contents
- Executive Summary
- Government and Taxes
- The Growth of Government
- Estimating the Tax Rate That Maximizes Growth
- How Americans Could Have Been Three Times as Wealthy
- Why Have Voters Allowed Such Private Wealth Destruction?
- What Can Be Done Now for Future Growth?
- About the Author
"An optimal tax rate would benefit all of society, not just a select few."
Most Americans, scholars included, subscribe to the Anglo-American public finance tradition of thinking of government as benign. From this point of view, policy choices often seem irrational and enigmatic. Public choice theorists see the behavior of the politicians and the constituencies that elect them as rational, self-interested and self-serving, having more to do with re-election and rent-seeking than with economic efficiency. In this view, excessive taxation may arise simply because the tax rate consistent with political equilibrium among competing special interest groups exceeds the rate that maximizes economic growth.
NOTE: Nothing written here should be construed as necessarily reflecting the views of the National Center for Policy Analysis or as an attempt to aid or hinder the passage of any bill before Congress.