A study by the Cato Institute covering 30 years confirmed the inverse correlation of metropolitan area taxes, growth in population and employment.
The investigator, Dean Stansel, Associate Professor, Economics, Lutgert College of Business, Florida Gulf Coast University was entitled, “Why Some Cities Are Growing and Others Are Shrinking,” noted, “Although there are numerous factors that can influence the growth of individual economies, one finds a consistent relationship between low taxes and high economic growth in metropolitan areas, states and nations.”
“Over the last three decades, large cities like Pittsburgh, Detroit, Cleveland, Buffalo, and Toledo have seen populations shrink. Cities like Houston, Atlanta, Dallas, Tampa, and Phoenix had populations grow rapidly. The policy differences between high-growth and low-growth areas gives evidence that may help declining cities reverse their fortunes.”
Dr. Stansel examined 100 largest U.S. metro areas and found the ten highest-tax areas, with state and local taxes of 12.4% of personal income had populations growing by 21% from 1980 to 2007, employment increasing 40% and real personal income by 75%.
In the ten lowest-tax areas, taxes with 8.3% of personal income taxes the population grew 64%, employment 108%, and real personal income 157%. In contrasting pairs of cities, Stansel observed in 1980, Austin, Texas, and Syracuse, NewYork, were the same size. Austin’s metro area had 590,000 people and Syracuse’ metro had 643,000 residents. By 2007, Austin’s population had increased by more than 1 million while the Syracuse population remained stagnant.
State and local taxes were 13% of personal income in Syracuse but only 9% in Austin. Stansel concludes: “Keeping tax burdens low appears to be an important ingredient in the recipe for economic prosperity. If high-tax, low-growth metro areas like Detroit, Milwaukee, Buffalo, and Syracuse want to be more like high-growth areas such as Dallas, Tampa, San Antonio, and Austin, they should lower their onerous burden of taxation and bring spending under control.”
Nationally we are at 40% total taxation, without borrowings. The Democrats want to take us to 60% while enlightened electeds know we should be at 18.3% to expand the economy and increase revenues. But, that reduces the number of people dependent on government, hence the power of the Elected Ruling Class, therefore the idea remains unpopular in Washington, DC.
And so again, we have modern statistical proof for what we have long been saying: Low taxes, more growth and now data again confirming the Genesis Curve, a great truth from antiquity. (See “Genesis Curve”)
No comments:
Post a Comment