Did high taxes cause the economy to underperform?

by: The Campaign Season 24. Feb, 2010 Comments Off

This might even be an issue that liberals and conservatives agree on, but I'm a little surprised this remains on the Treasury Department's website in the Obama Administration (I assume it was written in an earlier administration, but I don't know for sure). It is filed under the History of the U.S. Tax System:

During this time, the income tax was not indexed for inflation and so, driven by a rising inflation, and despite repeated legislated tax cuts, the tax burden rose from 19.4 percent of GDP to 20.8 percent of GDP. Combined with high marginal tax rates, rising inflation, and a heavy regulatory burden, this high tax burden caused the economy to under-perform badly, all of which laid the groundwork for the Reagan tax cut, also known as the Economic Recovery Tax Act of 1981.