The Historical Lessons of Lower Tax Rates

Publication Date: September 2002

Publisher: Heritage Foundation (Washington, D.C.)

Author(s): Daniel J. Mitchell

Research Area: Banking and finance; Economics

Keywords: Taxes

Type: Report

Abstract:

The economy is limping, incomes have been falling, tax revenues are stagnant, and it is projected that the deficit will more than double in the next ten years. This is the legacy of higher tax rates and a tax code that punishes working, saving, and investing. History shows clearly that the way to reverse this trend is to cut tax rates. Legislation to reduce rates would do this. Better still, Congress should scrap the current system as quickly as possible and replace it with a flat tax that treats all taxpayers equally and minimizes the burden on productive behavior.