I am unaware of any country in the history of the world that has taxed its way to prosperity. In the event you find one, please email me. Many examples, however, can be put forth to support the notion that higher taxes stifle economic growth.
Lower taxation stimulates economic growth by increasing disposable income for individuals and businesses. When individuals keep more of their earnings, they spend more on goods and services, driving consumer demand. This increased demand leads to higher sales for businesses, encouraging them to invest in expansion which means more capital spending and thus more employee hiring. A simple local example is that when Concord NH decides to cut taxes, the result is that people have more discretionary spending for going out to lunch and dinner and Murphy’s and Taipei and Tokyo would experience an increase in demand for French fries and egg rolls. To satisfy the increase in demand, our local restaurateur would have to buy another fryolator and also hire another fry cook to crank out the increased orders. That’s more money invested in the local economy.
While perhaps the above might add a smidge more pressure on the cardiovascular part of our healthcare system, I would argue that the overall net benefit to the economy is a plus. Multiply that times hundreds of restaurants and then add to that scenario, numerous other businesses such as landscaping, software development (yes that business is alive and well in the Granite state), retail sales, skiing and other tourism, research labs, etc…You get the picture.
In short, for businesses, reduced corporate tax rates mean more capital is available for reinvestment in operations, services, innovation, and technology. This investment can enhance innovation and productivity, leading to greater efficiency and growth. Additionally, lower taxes can attract out-of-state investment and corporate relocation to New Hampshire, as companies seek favorable tax environments to maximize returns. With reduced financial burdens, individuals are also more likely to start new businesses, fostering innovation and creating jobs. A thriving entrepreneurial ecosystem can significantly contribute to economic dynamism that will provide jobs and careers to many recent high school and college graduates so that they have an economic reason to remain in the state.
Overall, lower taxation encourages spending, investment, and entrepreneurship, all of which are crucial drivers of economic growth. While the balance of taxation is important for funding public goods, lower tax rates can create a more favorable economic environment that supports sustained growth and prosperity.