News release: Personal income tax cuts don’t spur job growth
For immediate release — Feb. 5, 2013
LINCOLN — Research finds no clear relationship exists between personal income taxes and economic growth, a report issued Tuesday by the OpenSky Policy Institute shows.
In fact, many states known to have relatively high income taxes have economically outperformed many of those that have no income tax at all, said Renee Fry, executive director of the OpenSky Policy Institute.
“In Nebraska, we have individual and corporate income taxes and our per capita GDP grow faster in the last 10 years than all of the states that have no income taxes,” Fry said.
According to the report, there also is no clear relationship between personal income taxes and unemployment.
And as is the case with GDP, Nebraska outperforms nearly all of the states without income taxes in unemployment, too, Fry said.
The report also rebuffs claims that an eliminated income tax would free up funds for small business owners to hire more workers and thus create more jobs in Nebraska.
The research shows what really leads to business growth in states are good schools, good roads and an educated workforce, Fry said.
“Income tax revenues have played a large role in helping us build this solid revenue,” Fry said. “Based on data, it’s hard to see how the plans proposed in LB 405 and LB 406 will help grow our economy and support our state’s infrastructure.”
The full report has been attached to this email and also can be found online.
Contact Chuck Brown at cbrown@openskypolicy.org