May 7, 2015

Georgia Budget and Policy Institute: Income Tax Cuts Won’t Boost Georgia Economy

ITEP Work in Action

Big income tax cuts did not improve the economies of states that enacted them, and states without income taxes do not consistently grow more jobs or have stronger economies. Six states cut income taxes sharply from 2002 to 2007, before the most recent recession. Three of them – Arizona, Ohio and Rhode Island – grew slower than the rest of the country in subsequent years. Those three states saw their share of the nation’s jobs and personal income fall by 4 percent and their share of economic output fall by 6 percent. Louisiana, New Mexico and Oklahoma are the other three states that cut taxes sharply in the 2000s and enjoyed above-average growth. But they are major oil-producing states that benefitted from a sharp rise in fuel prices.

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