Why Tax Rates Matter More Than Taxes

Published: June 27, 2018

Marginal tax rates – how much someone is taxed on the next dollar they earn – affect how much people work, save, and invest. Everyone is affected by their marginal tax rate, and lower marginal tax rates lead to more rapid economic growth.

Discussion Questions

1. How do marginal tax rates affect families at various levels of poverty?
2. Are there any benefits to high marginal tax rates?
3. Are there any negative consequences of low marginal tax rates?

Additional Resources

• Read John Cochrane’s blog post, “Economists and Taxes.” 
• Listen as John Cochrane discusses his blog post "Economists and Taxes," available here.
• Read “We Need Corporate Tax Reform” by Richard Epstein.
• Listen as Richard Epstein discusses his Defining Ideas article "We Need Corporate Tax Reform," available here.