State Tax Burden Misleading, Leading to Flawed Economic Growth Estimates.
Tax Burden, a measure of total tax revenues compared to personal income, is often used to evaluate state tax policies. A study from 1987 to 2000 shows that Tax Burden has significant errors due to factors beyond tax policy changes. These errors include income-related revenue changes not linked to tax policy. This finding has important implications for understanding the impact of taxes on economic growth.