Tuesday, August 24, 2010

Shlaes on Tax Policy

Amity Shlaes provides real-world data on the effects of tax policy.

Comparing New Hampshire and Maine, two very similar states, she shows why lower taxes tend to lead to a better economy.
The result? Decade in, decade out, New Hampshire’s economy grew faster than Maine’s, so that the Granite State surpassed the Pine Tree State in 1984 and today boasts an output that is 20 percent bigger. Maine’s recessions and double dips were worse than New Hampshire’s.

Eventually New Hampshire also won the population contest, passing Maine, in part thanks to migration. Last month, joblessness was 8.1 percent in Maine, better than Ohio but still bad, and 5.8 percent in New Hampshire.

No comments: