New Report Corrects the Top 10 Tax Myths

NEW YORK, NY — Tax policy will be the talk of Washington next year with debates already brewing over whether the Trump administration will extend the expiring 2017 tax cuts. Conversations prior to this decision will likely recirculate the most common myths from both sides of the political aisle about the federal tax system. But if both parties persist with a series of outdated, simplistic, and false assumptions about the tax system and its relationship to the economy, we could end up with poor tax policies. To encourage more productive conversations and better policy outcomes, Manhattan Institute senior fellow Brian Riedl combats imminent false narratives by correcting the “top 10 tax myths” in a new report. These myths include: 

• “Tax Cuts Pay for Themselves”
• “Tax Cuts Will Starve the Beast”
• “The Middle Class Pays Higher Tax Rates than the Rich”
• “Those Old 91% Tax Rates Raised Large Tax Revenues”
• “Europe’s Higher Tax Revenues Derive from Aggressively Taxing the Rich”
• “Tax Cuts for the Rich Drive Soaring Budget Deficits”
• “Taxing Millionaires and Corporations Can Eliminate the Deficit”
• “Most of the 2017 Tax Cuts Went to Corporations and the Wealthy”
• “Repealing All Post-1980 Tax Cuts Provides Painless Deficit Reduction”
• “America’s Corporate Taxes are Far Below International Standards” 

With budget deficits soaring and Congress preparing for the potential renewal of the 2017 tax cuts, it is more important than ever for both parties to challenge their assumptions and rely on modern tax data and research to guide their approaches. Otherwise, an excessively flawed tax code risks punishing families, discouraging economic growth, and failing to produce the necessary revenue to finance the federal government. 

Click here to view the full report.