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Inflation And Taxable Capacity: Some Recent Evidence, Barbara Allison Haney-Powell
Inflation And Taxable Capacity: Some Recent Evidence, Barbara Allison Haney-Powell
Masters Theses
Colin Clark's theory of inflation has had a profound effect on present-day economic theory concerning taxation policy. While his belief that inflation occurred when all tax revenues exceeded 25 percent of national income was rejected by his contemporaries in the 1940's, supply-side economists incorporate Clark's theory into their proposals for curing the unemployment and inflation of the 1970's and 1980's. These proposals gained popular support and resulted in the election of President Ronald Reagan who implemented such proposals. The purpose of this study is to determine the veracity of Clark's theory.
Clark's theory was tested in this study with the …