Wednesday, April 18, 2012

Do Higher Income Tax Rates Produce Lower Unemployment? History Says They Do!

April 18, 2012
By: D. DiFrancesco
Out of my own curiosity, I decided to look at the relationship between the top income tax rates by year and the annual unemployment rate.  My conclusions are based on the years 1950 through 2011.  I would also like to state that I am neither an accountant nor an economist so the statements I am making are my personal opinion based on what I see in the numbers.
The figures used for my conclusions were derived from two sources, the U.S. Bureau of Labor Statistics and the Tax Policy Center.
In the process of doing this analysis I learned some things which I found pretty fascinating...
  • The top tax rate during the 61  years being reviewed  occurred in 1953 with a rate of 92% and ironically, the annual unemployment rate was the lowest of any of the years sampled at 2.93%.

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