Taxes Matter XII: Sales, Profit and Excise Taxes are Most Economically Destructive


A recent study by Dr. Roger E. Brinner and Dr. Joyne Brinner, The Parthenon Group and Global Insight, Inc., sheds new light on the economic effects of various taxes. This study should be required reading for the Taxation Committee as they continue to pursue new tax reform options. In a nutshell, the study finds that sales, profit and excise taxes are the most economically destructive taxes while income taxes are only slightly so. After running an economic simulation through the Global Insight model of the U.S. economy, they state:
“The results are striking. The higher inflation created by equal-sized retail tax changes, plus the absence of a federal taxes by ‘deducters,