Report Detail Summary

The Competitive Economic Environment: Lessons from the States

May 09, 2017

While political campaigns in the U.S. are focused on federal tax policy and whether the top personal income tax rate should be increased or not, we believe that the states’ experiences have much to teach us about what happens when tax rates are changed. The parallel between the U.S. and the world economy is an obvious one. The U.S. consists of 50 separate state economies and factors of production, and as a result of the interstate commerce clause, the states enjoy free trade of goods and services and the factors of production enjoy freedom of movement. Thus, businesses and people can relocate anywhere within and across the states.

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