Relationship between effective marginal tax rate on capital income and economic growth, 1954–2006
| Real GDP growth | Effective marginal tax rate on capital income (1-year lag) | Trend line |
|---|---|---|
| -2.0% | 38.0% | 37.4% |
| -0.9% | 48.0% | |
| -0.6% | 38.0% | |
| -0.3% | 45.0% | |
| -0.2% | 31.0% | |
| -0.2% | 42.0% | |
| 0.2% | 45.0% | |
| 1.1% | 31.0% | |
| 1.8% | 30.0% | |
| 1.9% | 33.0% | |
| 2.0% | 44.0% | |
| 2.0% | 46.0% | |
| 2.3% | 42.0% | |
| 2.4% | 45.0% | |
| 2.5% | 30.0% | |
| 2.5% | 30.0% | |
| 2.5% | 48.0% | |
| 2.5% | 29.0% | |
| 2.6% | 30.0% | |
| 2.8% | 30.0% | |
| 3.0% | 26.0% | |
| 3.1% | 37.0% | |
| 3.1% | 46.0% | |
| 3.1% | 33.0% | |
| 3.3% | 42.0% | |
| 3.3% | 30.0% | |
| 3.4% | 33.0% | |
| 3.4% | 23.0% | |
| 3.5% | 33.0% | |
| 3.7% | 31.0% | |
| 4.0% | 31.0% | |
| 4.0% | 33.0% | |
| 4.1% | 33.0% | |
| 4.1% | 30.0% | |
| 4.3% | 31.0% | |
| 4.3% | 35.0% | |
| 4.4% | 31.0% | |
| 4.4% | 35.0% | |
| 4.5% | 40.0% | |
| 4.7% | 30.0% | |
| 4.7% | 33.0% | |
| 5.2% | 38.0% | |
| 5.2% | 44.0% | |
| 5.4% | 40.0% | |
| 5.6% | 34.0% | |
| 5.6% | 38.0% | |
| 5.9% | 42.0% | |
| 6.2% | 31.0% | |
| 6.3% | 29.0% | |
| 6.9% | 47.0% | |
| 6.9% | 34.0% | |
| 7.0% | 58.0% | 35.5% |
Note: Each dot shows the real GDP growth rate for a particular year and the effective marginal tax rate on capital income from the previous year. The line describes the relation between the two variables.
Source: Author's analysis of Bureau of Economic Analysis National Income and Product Accounts data (Table 1.1.1) and Gravelle (2006)