During the high-point of the 2012 election cycle, the Congressional Research Service (CRS) issued a study claiming that there is no evidence that marginal tax rates have any impact on economic growth. Republicans said that the study, which was touted in social and mainstream media as contrary to their economic position, was methodologically flawed. This paper duplicates the CRS study but changes the methodology to allow tax changes to have a lagged impact. Doing so generates the result consistent with a large body of theoretical and empirical literature that marginal tax rates and economic growth are inversely related.
|State||Published - Jan 2014|