Economics, Econometrics and Finance
4 years ago

High Taxes Stifle Growth and Efficiency, Leading to Economic Consequences

2 views
RePEc: Research Papers in Economics
The Effect of Taxes on Efficiency and Growth
Martin Feldstein

Paper Summary

High taxes on labor and investment income can reduce efficiency and growth. High personal tax rates lead to a loss of revenue and discourage work effort. Taxes on investment income also have negative effects on future consumption. Taxes on labor income are less damaging than taxes on investment income. Capital income taxes can distort economic activity.

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