Taxes & the Economy

June 17, 2020  |  

INVESTING IN PEOPLE & PUBLIC SERVICES PROVIDES A MUCH BIGGER BANG FOR THE BUCK THAN DO TAX CUTS

The chart below shows that for every $1.00 spent on state and local government services, the economy benefits by an estimated $1.34. That’s an immediate 34% return on the dollar. By comparison, for every dollar spent on most tax cuts, the economy loses money. For example, $1 spent on corporate tax cuts returns just 32 cents—a loss of two-thirds of every dollar spent.

Source: Mark Zandi, Moody’s Analytics
https://www.economy.com/mark-zandi/documents/2012-02-07-JEC-Payroll-Tax.pdf
https://www.cnn.com/2020/05/19/perspectives/state-government-bailout/index.html