A study by a Duquesne University professor affirms what liberals perpetually deny: Higher taxes pushed by the tax-and-spend crowd create less, not more, economic growth.
Specifically, higher state taxes lead to lower gross state product, fewer new businesses and, ultimately, less per capita income, according to an analysis by Pavel A. Yakovlev, a professor of economics and a member of the Commonwealth Foundation Council of Scholars.
Pennsylvania politicians who bank on brighter days with an extraction tax on Marcellus shale are fooling themselves if not deceiving the public they serve.
According to Mr. Yakovlev’s research, states with higher taxes and more spending have slower economic growth. That outcome is abundantly clear in Pennsylvania, with the 10th-highest tax burden in the country.
While Pennsylvania’s taxes and spending increased from 1970 to 2012, economic growth fell below the national average, the Commonwealth Foundation reports.
“Not all tax variables exhibit a significant correlation with the selected measures of economic activity, but when they do, the relationship is usually negative,” wrote Yakovlev in his analysis for George Mason University’s Mercatus Center.
Pennsylvania doesn’t need more or higher taxes. What’s sorely needed is a low-tax policy that encourages economic growth and, with that, more tax revenues.