Tax Cuts Don't Lead to Economic Growt...

Tax Cuts Don't Lead to Economic Growth, a New 65-Year Study Finds

There are 9 comments on the www.theatlantic.com story from Sep 17, 2012, titled Tax Cuts Don't Lead to Economic Growth, a New 65-Year Study Finds. In it, www.theatlantic.com reports that:

In 1990, President George H. W. Bush raised taxes, and GDP growth increased over the next five years. In 1993, President Bill Clinton raised the top marginal tax rate, and GDP growth increased over the next five years. In 2001 and 2003, President Bush cut taxes, and we faced a disappointing expansion followed by a Great Recession.

Does this story prove that raising taxes helps GDP? No. Does it prove that cutting taxes hurts GDP? No.

Join the discussion below, or Read more at www.theatlantic.com.

“I'd rather be snowmobiling”

Since: Oct 07

8120'

#1 Sep 17, 2012
There goes 1/2 of Rmoneys platform. The other leg gets kicked out when his taxes get "leaked" on Nov 1st......
Sheik Yerbouti

Warrington, PA

#2 Sep 17, 2012
Anyone with half a brain knows that tax cuts for the very wealthy have never created jobs or boosted the economy! To really balance the budget cuts need to be made and taxes will have to be increased for everyone.

“It's a Brand New Day”

Since: Feb 06

New Rochelle

#3 Sep 17, 2012
Sheik Yerbouti wrote:
Anyone with half a brain knows that tax cuts for the very wealthy have never created jobs or boosted the economy! To really balance the budget cuts need to be made and taxes will have to be increased for everyone.
TAX cuts for the wealthy certainly have created many jobs.
The jobs created are in China, Singapore, Bangalore, Masdas, Mexico, Pakistan, Brazil.

So, if you believe in tax cuts for the wealthy, for jobs, move. Follow the money to the third world.
BO Non stop Media Farting

Anonymous Proxy

#4 Sep 17, 2012
Contrived study about taxes paid for and bought by Barack.

Ignore these fake arithmetic studies just like Clinton's "arithmetic" and advertised studies showing how you get $3000 back if you vote for Barack.

NOTHING THE MEDIA REPORTS EVEN IF A "STUDY" OR "RESEARCH" OR "FACT" ARE TRUE.

I G N O R E the Media Sirens, they have indigestion over Barak's stupidity and are FARTING 24/7 6 WEEKS TO GO OF IT.

“It's a Brand New Day”

Since: Feb 06

New Rochelle

#5 Sep 17, 2012
BO Non stop Media Farting wrote:
Contrived study about taxes paid for and bought by Barack.
Ignore these fake arithmetic studies just like Clinton's "arithmetic" and advertised studies showing how you get $3000 back if you vote for Barack.
NOTHING THE MEDIA REPORTS EVEN IF A "STUDY" OR "RESEARCH" OR "FACT" ARE TRUE.
I G N O R E the Media Sirens, they have indigestion over Barak's stupidity and are FARTING 24/7 6 WEEKS TO GO OF IT.
You are so right. Follow FOXLIES into the cave near Hamlin.
Ignore reality.
Blame Obama for Bush's mess.
Romney really cares about working people.
Ryan really hates rape.
gossamer

Warren, MI

#6 Sep 17, 2012
Obama is giving tax cuts to everybody.
E Pluribus Unum

Fishers, IN

#7 Sep 17, 2012
Mr_Bill wrote:
<quoted text>
TAX cuts for the wealthy certainly have created many jobs.
The jobs created are in China, Singapore, Bangalore, Masdas, Mexico, Pakistan, Brazil.
So, if you believe in tax cuts for the wealthy, for jobs, move. Follow the money to the third world.
read Bush lips no more tax!!! ;) don't ask Obamacare 4UBill buttt ask what can U care 4Obamath;-0000
E Pluribus Unum

Fishers, IN

#8 Sep 17, 2012
Mr_Bill wrote:
<quoted text>
You are so right. Follow FOXLIES into the cave near Hamlin.
Ignore reality.
Blame Obama for Bush's mess.
Romney really cares about working people.
Ryan really hates rape.
Bush1,2 n Bill passdown to yo Obama Volt!!! ;-0000h, Bill reset yee password ;)
Mothra

Phoenix, AZ

#9 Sep 17, 2012
twostroketerror wrote:
There goes 1/2 of Rmoneys platform. The other leg gets kicked out when his taxes get "leaked" on Nov 1st......
Congressional Research Service Wrongly Implies Lower Tax Rates Donít Strengthen Economy

The Congressional Research Service (CRS) set out to make a convincing case that lower income tax rates do not strengthen the economy. It failed, but in so doing, it called into question the quality of CRS analysis and the institutionís credibility as non-partisan.

The CRS is supposed to provide expert, objective, non-partisan research analysis to Congress. Most of the time, the CRS performs this function admirably and diligently; the longstanding episodic exception has been in tax policy. The most recent example of this partisan divergence is a report setting out to do the impossible: use historical data to argue that lower rates do not encourage stronger economic growth and, by implication, that higher marginal tax rates such as those espoused by President Obama do not discourage economic growth.

The CRS report presents a slew of periods between 1945 and 2010 comparing the top marginal income tax rates and capital gains rates with economic growth rates. From these correlations the author concludes that lower rates do not correlate with stronger economic growth.

In fact, these stylistic correlations prove nothing. In short, the economy is more complicated than this simplistic approach can acknowledge. For the analysis to prove anything, it needed to account for countless other economic and policy factors, many specific to a given period, and determine how those factors influenced economic growth in the period in question. With this as background, the analysis would then have to isolate the effect lower rates had on growth.

CRS, and many others that argue against lower tax rates, mislead when they make such flimsy correlations because they fail to disclose that no two time periods are the same. Comparing 1950 to 2010 just on tax rates is ludicrous. The world and tax policy are entirely different in those timeframes. If CRS tried to account for all the differences, and then determine how tax rates influenced growth, it would find a different and more accurate answer: that lower rates encourage growth.

There is little doubt about this. One need only look at how liberals approach tax policy when it comes to behaviors they donít like. For instance, when it comes to energy consumption, carbon production, cigarette smoking, and countless other liberal bugaboos, their answer is always the same: Raise taxes on the behavior to cause people to cut back on it. Liberals canít seem to apply the straightforward converse of this logic to economic growth, for some reason.

Of course, if you tax income, investment, and savings less youíll get more of them and the stronger growth that comes with the increase in these activities. And if you raise tax rates on those most able to react, then the reactions will be that much more pronounced. Upper-income taxpayers have the most capacity to adjust their behavior; by shifting the composition of their labor income to avoid tax, to shift the composition of their investments to avoid tax, or to shift away from work effort toward leisure.

It is vital that the public, the media, and, most importantly, policymakers donít fall for misleading analysis, even when it comes from an otherwise credible source. The economy is in bad shape and will remain that way unless and until it gets better policy from Washington. One of those policy improvements would be lower tax rates through tax reform.

http://blog.heritage.org/2012/09/17/congressi...

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