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Supply Side Starvation

June 27, 2012

A blog post in today’s NYTimes reports on a study released by the non-Partisan Center for Tax and Budget Accountability indicating that states with high income taxes had higher growth rates over the past decade than states with no income tax…. proving that “trickle down” economics doesn’t work. Ralph Martire, the Executive Director of the Center was quoted in the linked article in Bloomberg as saying:

“Those who don’t believe in Santa Claus or the Easter Bunny anymore, and actually look at facts and data, recognize that since supply-side economics has been implemented in America, the complete opposite of what supply siders had promised has occurred,”

So… starving the beast seems to also starve economic growth… at least economic growth as measured by median household income and per capita economic output. It IS possible, though, that those with the highest incomes fared better in those no-income-tax states… after all, the MEDIAN can drop but the top income can rise and the result might be no change in the MEAN income… I’m sure this study will be quoted in the coming months….

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