In September, the Congressional Research Service found that over the last 65 years the level of income tax rates and capital gains rates was not a predictor of economic growth.

FORBES: How I Know Higher Taxes Would Be Good For The Economy

Consider the following: when the economy slumps, this lowers tax revenues (because people have less money) and raises, without any legislation being necessary, government spending (because, with the lower level of economic activity, more people qualify for unemployment and income assistance).

FORBES: Why the Private Sector NEEDS the Government to Spend Money

There is an optimal tax level to maximise tax income, the same type of curve applies to government and economic strength.

FORBES: The Economics Of The Recent Era Are Dead

However, the tax laws and the recent economic stimulus address household income on a national level and do not take into account the cost of living by state, as far as I know.

WHITEHOUSE: Town Hall in Los Angeles