Recovery By The Numbers

Recovery By The Numbers.

Arguments about the size of government are not just ideological; they are economic.  At what point does increased taxation reduce growth?  At what higher point does it reduce revenues?  If the government spends 20% of the GDP, financed by taxes, tax rates on the rest of the economy (business, nonprofits, households) must average 25%.  If government were to spend 25% of the GDP, tax rates would have to average 33%.  Much depends on how government structures taxes and spends revenues.  There is no sure knowledge, but I suspect that the tax rate that begins to reduce economic growth is much closer to 25% than to 33%.

Government versus private investment.

%d bloggers like this: