a new paper by David Hope of the London School of Economics and Julian Limberg of King’s College London, examined 18 developed countries over a 50-year period from 1965 to 2015. The study compared countries that slashed taxes on the wealthy, with those that didn’t.
Per capita gross domestic product and unemployment rates were nearly identical after five years in countries that slashed taxes on the rich and in those that didn’t, the study found.
the analysis discovered one major change: The incomes of the rich grew much faster in countries where tax rates were lowered without trickling down to the middle class
the study did not find any significant effect of tax cuts on economic growth and unemployment. Gross domestic product per capita and unemployment rates are nearly identical after five years in countries that cut taxes on the rich and in those that did not.
“Based on our research, we would argue that the economic rationale for keeping taxes on the rich low is weak,” Julian Limberg, a co-author of the study and a lecturer in public policy at King’s College London, said to CBS MoneyWatch. “In fact, if we look back into history, the period with the highest taxes on the rich — the postwar period — was also a period with high economic growth and low unemployment.”
Julian Limberg of King’s College London
the research ended in 2015 and doesn’t include President Donald Trump’s massive 2017 tax overhaul, which slashed taxes for the rich and corporations. Limberg, who co-authored the study with David Hope, a visiting fellow at the London School of Economics’ International Inequalities Institute, said that he wouldn’t expect the results of Trump’s tax cut to be much different.