IPI Publication Press Release
IPI Economic Scorecard
Related Publication Title:
Different This Time? High Tax Burden Could Help End this Boom, as it Did Last Time
Released by Sonia Hoffman on 03/01/2000
IPI Economic Scorecard
Related Publication Title:
Different This Time? High Tax Burden Could Help End this Boom, as it Did Last Time
Released by Sonia Hoffman on 03/01/2000
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Press Release (03/01/2000)
Press Release (03/01/2000)
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The One Thing That Can Wreck This Economy
For Immediate Release
For Further Information, Contact: Sonia Hoffman 972-874-5139
Dallas, TX: What is about the only thing that could halt today’s longest economic expansion in history? Politicians' endless appetite for tax dollars, that’s what. Sustained high tax rates could easily squeeze off current growth—just as they did in the 1960s.
The 1960s ushered in an economic boom quite comparable to today’s—peaks in GDP growth, job creation, investment, and the stock market—but during which politicians increased average and marginal tax rates, thereby laying the groundwork for stagflation.
Thus, when current taxes at all levels of government take a larger bite out of national income today (31%) than they did during the 1960s, economic worries easily set in.
In addition, marginal tax rates are also up. In 1997, federal, state and local taxes claimed 56.4 cents of the next dollar of output produced by private businesses, up from 48.3 cents in 1991.
- “What must be remembered is that, just as in the 1960s, higher inflation from wrong-headed monetary policy or ever-increasing taxes that lower returns to workers and investors could again bring the now-longest economic expansion in history abruptly to an end,” says Gary Robbins, Senior Research Fellow for the Institute for Policy Innovation (IPI).
If policy movers and shakers don’t learn the lessons from the 1960s, America’s longest economic recovery could be in for a premature termination.
This information was taken from a forthcoming Economic Scorecard: Fourth Quarter 1999 by Gary and Aldona Robbins, Senior Research Fellows for IPI. The Scorecard will be released on Wednesday, March 1, 2000 and can be found at out website www.ipi.org or by calling 888-557-4IPI. The authors are available for interview.
