Today at 8:30 a.m., the U.S. Bureau of Economic Analysis will release second quarter GDP numbers. If it reports negative economic growth as economists expect, then a technical recession has already begun in the United States. Colorado can insulate itself by reducing the state income tax.
Understanding why an income tax reduction would help ease recession pains requires first understanding how we got here.
Attempting to stop the spread of the COVID-19 pandemic in early 2020, governments mandated economic shutdowns and induced recession. To re-stimulate the economy, Congress issued $5 trillion in federal aid. Because the U.S. Treasury did not have that much money, the U.S. Federal Reserve Bank effectively printed it into existence. To encourage the creation of additional money in the economy through borrowing, the Fed also lowered interest rates to near zero.
See the full article by Ben Murrey and Stepan Mysko, July 28, 2022