Saturday, March 9, 2013

CRS Report: Cutting Taxes for the Rich Does NOT Grow the Economy

Sorry if this is old news (from last fall) but this item is particularly well stated by former NY governor Eliot Spitzer on Slate.

And we now have the analysis, a fascinating report just issued by the Congressional Research Service. The CRS is a nonpartisan entity that produces academic-quality research to answer tough policy questions. The bottom line conclusion of the CRS report is this:

The reduction in top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.
The report notes that tax rates were at the highest when growth was at its peak, and that the reduction in rates has not had any discernible impact on the types of investment that lead to growth. Rather than acknowledge the findings, however, Senate Republicans successfully pressured the CRS to withdraw the report. It is reminiscent of a different era, when news the government didn't like was simply suppressed.

The GOP's clear response to this study is: "Data be damned, reality is what we say it is."

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