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  • Summers’ Tax Rate Comments A Substantial Revelation

    Lawrence Summers, the Director of the White House National Economic Commission recently committed an unpardonable sin – he revealed two unpleasant truths in a single sentence. Summers said, “I don’t find there to be much evidence that suggests that raising the top marginal rates from 35 to 39 percent that will be implicit in the repeal of the Bush tax rates will do substantial damage to the incentives in the economy”. [emphasis added]

    The modifier “substantial” is the key to the first Summersian truth. Will raising the tax rates cause another recession? No. But as Summers indicates with his carefully chosen modifier, raising rates will weaken incentives in the economy. It will prolong the period of economic weakness, just as occurred when President Clinton raised the rates the first time. The debate is only about the extent of the damage, and of course the extent would be greater than Summers admits.

    The second Summersian truth is the revelation of a core liberal mindset that spans policies and endures decades – the willingness to forego jobs and wages for American workers to achieve other goals liberal policymakers deem more worthy. In the case of tax rates, Summers admits growth will be sacrificed at the alter of a soak-the-rich mentality married to the need to fund Obama’s spending surge.

    Health care reform has become an excuse to expand the reach of government and levy even higher taxes. The new House health care bill has yet higher rates than Summers was talking about: another blow to jobs and wages.

    Cap and trade, a.k.a. pack and move for what it would do to the nation’s manufacturing sector, is an explicit, enormous trade off of lower economic growth for environmental goals. Recognizing the damage this policy would do to the economy, proponents anxiously argue that a few “green jobs” building subsidized windmills can compensate for the millions of real jobs destroyed if this legislation reaches the president.

    Aside from the wrongness of the policies proposed to justify a loss of thousands of jobs, liberals consistently fail to grasp how these policies would compound, piling job losses on top of job losses. One such trade off is understandable, conceivably even defensible. But jobs and wages lose out every time in the liberal equation, and this is unpardonable.

    Even more perplexing is Obama’s lack of any substantial policy proposal to encourage economic growth. Spending cuts? Pro-growth tax cuts? Reductions in the regulatory burden? No, no, and no. Where’s the growth Dr. Summers? Where’s the jobs Mr. President?

    Posted in Economics [slideshow_deploy]

    12 Responses to Summers’ Tax Rate Comments A Substantial Revelation

    1. Crazy Politico, Illi says:

      Cap and Trade will work about as well as Clinton's misguided "luxury tax" that didn't keep rich people from buying expensive boats. I just kept them from buy in the US, devastating our boat building industry.

      Cap and Trade will be the same thing on a much grander scale.

    2. Jon H, Minneapolis M says:

      "Altar," not "alter."

      Just sayin'.

    3. ame, PA says:

      …and Warren Buffet backed Obama? … some genius…

      and Paul Volcker is an economic advisor to Obama???

      Summers is a well-established liberal Keynesian misguided slave. How can such a supposedly educated man actually be so unlettered in economics? Does anyone study history?

      How and why are these men comfortable with Obama's Fascist/Statist (Fascism tends to include a belief in the supremacy of one national or ethnic group, a contempt for democracy, an insistence on obedience to a powerful leader, and a strong demagogic approach – all fits with Obama's false ego/sociopathic tendencies, all of which were blatantly obvious during the campaign) ideology?

      Where are the powerful Americans who should be speaking out – Gates, Trump (he is a wind bag on everything else, for instance – against Obama's anti-American anti-capitalist seizure of the USA?

      Only Wynn and Mackey have shown such backbone and, therefore, deserve respect.

    4. Gary, Waxhaw, NC. says:

      After all these initiatives are enacted, put in place and the economy and US production tank, how does The One's administration get a pass? Do they just keep blaming Bush for decades the way Hoover was/is blamed?

      What if tanking is what they want? How do we prove it and get others to listen/believe? They'll never be held accountable except by ~ 10% of the media.

    5. Daver Ft. Worth says:

      The last 2 paragraphs say it all. The administration and Congress is so out of touch with mainstreet that they have NO clue that they are killing–not just injuring, the goose!

      In the 2010 elections won't they be surprised when they see what's on the table!

      Is it also now wrong to only want the white meat? Used to be, you could claim health reasons for wanting the less fatty white meat–but in today's world, there could be "table" police judging what you don't eat as well as what you do? Just asking?

    6. Jeanne Stotler, wood says:

      IN the 30's I remember my dear grandfather fusing about all the money FDR was spending. As a staunce Rep. he was dismayed by all the taxing and spending. WWII saved FDR, what is going to save BHO?? We are at war in Iraq and Afgan. but this is not helping our economy. First we need to encourage US made goods, second lower taxes not raise them and third make gov't smallr not bigger, fourth FIRE all those czars( or get them vetted) and do crimenal background checks on all employes with access to the white house and the old treasury build. next door, this should also include Holter in Justice, then adhere to the letter of the Constitution.

    7. Cheri, California says:

      The very existence of this administration is proof that the country has been destroyed from within. The irresponsible will always caterwaller(sp) about their self created conditions. Achievers know where "stuff" comes from. whiners don't. Liberal/Leftists are always running a "distraction" campaign. Education has been under attack for decades, the family, moral decency etc. We have to rebuild. Just because things are not totally in ruins don't be fooled. Back to basics-Life, Liberty and the pursuit of happiness at the individuals expense, not the "collective".

    8. Bill, Forney, TX says:

      … I don't recall the Bush tax cuts being a series of bills. It was a single bill. If you allow the tax cuts to expire in a few months (since they were never made permanent) don't all of the tax cuts expire? I haven't heard much in the media about all of the taxpayers in this country getting a tax increase at the beginning of the next year & how much it will be for each income group. The libs can play semantics and say it isn't actually a tax increase, but it will certainly feel like one to people who have been paying lower taxes since 2002.

    9. Lynn B. DeSpain says:

      If business were allowed to function as business, the need for taxes would be small indeed. Now with the Government owning forty five percent of Private Business, the taxes will keep going up, because the Government has never done anything that made a profit! If government ran Crime, it couldn't make a Profit!

    10. Jerry from Chicago says:

      No matter what you think of Mr. Obama, this guy is in over his head. He can't fix the economy, because he doesn't know how it works. He can't plan an exit strategy for Iraq or a winning strategy for Afghanistan because he's had no military experience and he's afraid that following the advice of his generals will upset his liberal base. He has no energy policy, except to keep talking about "Cap & Trade", which will do nothing to reduce our dependency on foreign oil, nothing to reduce pollution, but will raise the costs of energy (and everything else) to new highs.

      Instead of using the Stimulus money to build new nuclear power plants, new refineries, encourage new drilling both offshore and in Alaska and rebuild the nations power grid infrastructure — all of which would put people back to work and reduce our dependency on foreign oil — Mr. Obama chooses to criticize his critics at townhall meetings and on the Fox Network. That solves a lot of problems.

      Mr. Obama is not an honest guy. He doesn't deliver on his promises. He doesn't transcend politics; he exemplifies politics. He doesn't transcend race in America; he makes race an issue in America. Anyone who criticizes him or his policies is branded a racist by his supporters.

      If the government confiscated all the money of all those who are considered the richest 1% or 2% in America, it couldn't come anywhere near what this man has already spent. And after all the wealth has been confiscated from the richest 1% or 2%, and the country is still trillions in debt, what's next year's magic trick? Confiscating all the wealth of the 'richest' 20% or 25% of Americans? A couple of years of this kind of strategy and there won't be anything left to take from anyone, we will all be equally broke. Is that the master plan, Mr. Obama?

    11. Denise Utah says:

      The only inherent virtue of socialism is the equal sharing of misery. I think they know exactly what they want- the destruction of the middle class. I recently read an email that had a list of personal staffers to the First Ladies. Hillary Clinton had 3. Laura Bush had 1. Michelle Obama has 22 and still counting at a total of over $1,500,000 in salaries. Can anyone substantiate this? Hope and change has turned into hype and chains. Will there be a free America left in 3 years?

    12. Steve Call says:

      Thanx for superb post. But I had trouble navigating around your site as I kept getting 502 bad gateway error. Just thought to let you know.

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