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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Peter Dierks who wrote (33833)	3/9/2009 11:21:04 AM
From: TimF	Read Replies (2) \| Respond to of 71588

Economist Gerald Scully, a Senior Fellow at the National Center for Policy Analysis and a professor at the University of Texas at Dallas, has calculated that the greatest economic growth in the United States occurs -- and the most tax revenue is produced in the long run -- when federal, state and local governments combined take no more in taxes than about 21% of GDP. Then it should be called a reasonable maximum size, not an optimal size. But when governments continue to increase the tax load and use the increased amount mainly for transfer payments, it is a drag on the economy. Beyond a certain point, people have less reason to save and invest, entrepreneurs have less incentive to be innovative, workers don't work as much, and people try to avoid or evade taxes. Its not like this factor suddenly kicks in at 21%. It may accelerate at around that point, but its a factor at lower levels as well.