Income Tax Is Great


Many politicians try to in essence buy votes by promising voters that they will cut their taxes. Many states attract residents by suspending income tax altogether. Fools! Read some freaking facts, why don’t you?

Not just good in the sense that “Rich people have too income, and we must tax it for the common use, due to the basic dictates of socialist morality”—also good in the sense that factual numbers and statistics show that income taxes are not hurting the places that have income taxes!! Republican tax loons fuck off! A report from the Institute on Taxation and Economic Policy examines the results of a natural experiment on taxation that has emerged within our country: The economic performance of the states that have no income tax versus the economic performance of the states that have the highest income taxes. So just how badly have these high income tax states been decimated by their terrible, terrible confiscatory tax regimes?


The report finds that, over the past decade (which includes both a recession and a recovery), “States levying the highest top personal income tax rates are experiencing faster economic growth than states without such taxes. This is true of growth in the overall size of these states’ economies and, more importantly, of economic growth per person.” The ITEP also finds that “Average incomes are growing more quickly in the states with the highest top tax rates.” It’s not that the states without income taxes have failed in their goal of attracting new residents—the report finds that the no tax states are growing in the number of jobs—but that generalized growth has not kept up with population, and has not resulted in the residents of those states getting richer than residents of higher tax states. And, of course, doing away with that income tax revenue has a cost: “Relative to the states with the highest top income tax rates, states without personal income taxes levy higher overall taxes on the poor, due largely to their heavy reliance on regressive sales and excise taxes to fund public services.”

Does this show that high income taxes cause great economic growth? Not necessarily. But we don’t have to show that. All we have to show is that the rationale that state officials use to justify not having an income tax—that it will boost the economy for everyone, via a vaguely articulated trickle down process that sounds kinda plausible but never seems to materialize in reality—is bullshit!

It’s bullshit!

[The full ITEP report]

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