D Clarity

What Is This Weird Balloon For

how high taxes stimulate economic growth

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David Sirota argues that contrary to what many people think, high taxes are associated with strong economic growth:

“The real problem facing the Greeks is not how to reduce spending but how to increase revenue collections,” the report concludes, fingering Greece’s comparatively “anemic tax collections” as its economic problem.

On the other hand, the opposite is also true — as Clinton noted, some high-tax, high-revenue nations are excelling.

“Brazil has the highest tax-to-GDP rate in the Western hemisphere,” she pointed out. “And guess what? It’s growing like crazy. The rich are getting richer, but they are pulling people out of poverty.”

What is the mechanism by which taxes lead to growth?

the easiest way wealthy business owners can avoid high-bracket tax rates is by plowing their profits back into their businesses and taking the corresponding write-off rather than simply pocketing the excess cash and paying an IRS levy.

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Written by geek

10/07/2010 at 4:42 am

Posted in economy

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