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Lower Taxes and Economic Growth: Response to a Flawed Analysis
Publication Date: June 2007
Publisher(s): Tax Policy Center
Author(s): Kim Rueben; Iris Lav
Special Collection: John D. and Catherine T. MacArthur Foundation
Topic: Banking and finance (Taxation and tax policy)
Keywords: Tax Policy; Economic Stimulus; State and Local Issues; Fiscal future
Type: Report
Abstract:
When the Speaker and other leaders of Florida's House of Representatives released their plan to roll back property taxes and place a tight growth limit on state and local revenues, they included a report in their release by the firm Arduin, Laffer and Moore that claims lower taxes will lead to higher economic growth. We examine and point out the flaws in this analysis and show the authors' fundamental result is due to how they constructed their data and an elementary statistical mistake.