History proves that low taxes and low spending work
By Bruce Thompson
December 10, 2022
Concerns about an economic slowdown and recession are increasing. Wall Street CEOs and analysts are warning that the 2023 outlook for the U.S. economy is grim.
The Biden administration , however, thinks that the economy is in great shape and that its policies of high taxes and more spending are the best way forward.
But increasing taxes and spending is a failed economic theory that leads to long-term poor economic results. In fact, our real-world economic history shows that an economic strategy of lower tax rates and spending is the best way to achieve strong economic growth.
In the early 1920s, coming off the First World War and a major pandemic, with spending high and tax rates up to 77%, economic growth had fallen three years in a row. Presidents Harding and Coolidge adopted an economic policy of spending and tax cuts, reducing the top tax rate to 25% and setting off an economic boom. From 1922 to 1929, the economy grew at an average annual rate of 4.7% and unemployment dropped to 3.2%.
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