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New ALEC Study Debunks 7 Tax Myths Used to Justify Tax Increases


A new study released Wednesday by the American Legislative Exchange Council (ALEC) debunks myths which advocates of higher taxes use commonly—and wrongly—when attempting to justify tax increases.

Using overwhelming theoretical and empirical evidence, Tax Myths Debunked confirms what is clearly proven in Rich States, Poor States: The key to economic prosperity at the state level is in free-market, pro-growth policy. Co-authored by economists Dr. Randall Pozdena, former vice president of the Federal Reserve Bank of San Francisco, and Dr. Eric Fruits, Tax Myths Debunked shows the fallacy of seven popular tax myths commonly used by advocates of higher taxes:

  • Myth 1: Increased government spending stimulates the economy during recessions
  • Myth 2: Lower tax rates are bad for the economy in a recession
  • Myth 3: Raising tax rates will not harm economic growth
  • Myth 4: Austerity in the form of spending cuts will harm growth and employment
  • Myth 5: Real household income has not grown in the past 20 years
  • Myth 6: The distribution of income is increasingly inequitable
  • Myth 7: Raising tax rates on the rich will not harm the economy

Tax Myths Debunked exposes the degree of data manipulation that “progressive” groups will use to make their case for higher taxes and larger government. For instance, the Iowa Policy Project and Good Jobs First used cherry-picked data and inaccurate statements to argue for higher taxes in their pamphlet, “Selling Snake Oil to the States.” They claim that the rankings in Rich States, Poor States has no impact on state economic growth. However, Dr. Randall Pozdena and Dr. Eric Fruits prove the clear relationship between Rich States, Poor States rankings and strong state economic growth.

Click here to read Tax Myths Debunked.

About Steve Robinson

Steve Robinson is the former editor of The Maine Wire and currently the executive producer of the Kirk Minihane Show. Follow him on Twitter @BigSteve207.

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