Government

Lower State Income Tax Does Not Spur Economic Development

States with higher per capita tax collection rates are more affluent, with higher concentrations of talent and highly educated people.
Cris Kelly/Shutterstock.com

The idea that lower income taxes spur economic development is a mantra for many Republicans and fiscal conservatives. Their argument is that lower tax rates provide the needed financial incentives that attract capital, entrepreneurs, businesses, and talented people.

But is this actually true?