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Blessings of Liberty

by John Hoodvia Policy Review
Monday, July 1, 1996

John Hood on how business delivers the good

Blessings of Liberty

by John Hoodvia Policy Review
Wednesday, May 1, 1996

America's best job training

We the People

by Adam Meyersonvia Policy Review
Wednesday, May 1, 1996

Creating wealth in the inner cities

Trade Secrets

by Christopher Garciavia Policy Review
Wednesday, May 1, 1996

Global markets spur Toledo's turnaround

Taxation and Economic Performance

via Analysis
Wednesday, May 1, 1996

Over the past two centuries, economists have debated whether or not higher rates of taxation lead to increased levels of government revenues. In the eighteenth century, Adam Smith pointed to a reduced level of revenues from substantially higher tariffs and duties on traded goods. In the twentieth century, the Laffer Curve postulated that there would be no government revenue at a taxation level of 100 percent or 0 percent. More recently, the debate focused on the tax increases of 1990 and 1993, which were designed to reduce the federal budget deficit through an increase in government revenues. In fact, the forecasted revenue generation following each tax increase fell short of the mark.

Increases in tax rates have not raised the desired additional revenues, but they have dampened economic activity. Higher tax rates tend to reduce the tax base as taxpayers have disincentives to work, produce, save, or invest. There are, however, incentives to hide, shelter, and underreport income as tax rates are raised. Thus, the economy as a whole tends to perform less well following a tax increase. Conversely, the economy tends to perform more favorably following a reduction in tax rates. In the postwar period, government revenues as a percentage of gross domestic product have averaged 19.5 percent despite marginal income tax rates as high as 92 percent and as low as 28 percent. Despite the historic record, policy makers continue to embrace the notion that an increase in marginal tax rates will raise revenues without any attendant adverse effects on economic growth, job creation, or standard of living.

Home Front

by Elizabeth Schoenfeldvia Policy Review
Wednesday, May 1, 1996

Drumbeats for divorce reform

Spirit of '96

by Robert Rector, Grover Norquistvia Policy Review
Wednesday, May 1, 1996

The states carry the Republican revolution forward

Abuses and Usurpations

by John Walters, Greg Forstervia Policy Review
Wednesday, May 1, 1996

A wet blanket for volunteer firefighters; racial quotas in the drug wars

The Right Kind of Corruption

by Hilton L. Rootvia Hoover Digest
Tuesday, April 30, 1996

Payoffs and slush funds may be rampant in Asian countries such as South Korea and Taiwan, but they don't seem to have interfered with economic growth. Hoover fellow Hilton L. Root explains why.

Property Law 101

by Tom Bethellvia Hoover Digest
Tuesday, April 30, 1996

What causes economic growth? Hoover media fellow Tom Bethell surveys commonplace theories and finds many of themincomplete. What do they overlook? Property rights.

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Economic Policy Working Group

 
The Working Group on Economic Policy brings together experts on economic and financial policy to study key developments in the U.S. and global economies, examine their interactions, and develop specific policy proposals.

Milton and Rose Friedman: An Uncommon Couple