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Brookings: How Income Tax Changes Impacts Economic Growth

Photo of 20 dollars by Vitaly, Sand City, United States - via Unsplash

A report from Brookings: “Effects of Income Tax Changes on Economic Growth.”

Brookings has an interesting white paper about how changes to the individual income tax affect long-term economic growth.

The structure and financing of a tax change are critical to achieving economic growth. Tax rate cuts may encourage individuals to work, save, and invest, but if the tax cuts are not financed by immediate spending cuts, they will likely also result in an increased federal budget deficit, which in the long-term will reduce national saving and raise interest rates.

The net impact on growth is uncertain, but many estimates suggest it is either small or negative.
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Federal Income Tax

OECD Report: Income taxes in the U.S. are relatively low

Photo of 20 dollars by Vitaly, Sand City, United States - via Unsplash

Americans love to gripe about income tax rates, particularly in April.

However a new report indicates that U.S. tax rates aren’t that high compared to other developed countries.

The Organisation for Economic Co-operation and Development (OECD) released its annual Taxing Wages report yesterday. The study finds that the tax burden of U.S. workers is below average on a global scale.

The average single U.S. worker with no children paid a 32 percent overall tax rate in 2016 compared to the OECD aver of 36 percent. Continue reading “OECD Report: Income taxes in the U.S. are relatively low” »