Friday, August 5, 2011
- President Bush’s tax cuts are a significant contributor to projected deficits
- Higher-income people can and should share in the sacrifices needed to reduce long-term deficits
- Taxes are low both in historical terms and in comparison with other countries
- A large chunk of federal spending takes place through the tax code
- Taking taxes off the table would force crippling cuts in entitlement programs
Attacks on sorely-needed increases in state tax revenues often include the unproven claim that tax hikes will drive large numbers of households — particularly the most affluent — to other states. The same claim also is used to justify new tax cuts. Compelling evidence shows that this claim is false. The effects of tax increases on migration are, at most, small — so small that states that raise income taxes on the most affluent households can be assured of a substantial net gain in revenue.