According to a recent White House video explaining the administration’s opposition to extending the 2001 and 2003 tax cuts, Council of Economic Advisers Chairman Austan Goolsbee claims: “If you ask objective economists and analysts around the country about what is effective you will find that everyone agrees that these giant tax cuts for very high income people are the least effective thing that we can do to get the economy growing.” Everyone agrees? If your definition of objective economists is limited to the White House’s economic team, then perhaps this …
Earlier this week, Maya MacGuineas, a fiscal policy expert at the New America Foundation, ranked Congress’s options in addressing the pending expiration of the 2001 and 2003 tax cuts. A little more than two months remain before an automatic tax hike on all American earners sets in, and Congress has yet to act. Here, we compare MacGuineas’s rankings to our own solutions. Above all, MacGuineas favors sweeping tax reform, describing the current system as “outdated, overly complex, a drag on economic growth, and as leaky as an old fisherman’s dingy.” …
With the expiration of the 2001 and 2003 tax cuts fast approaching, the debate over whether to extend the cuts, and for whom, has taken on a new face. Proponents of allowing for tax increases on the highest income brackets, or in some cases, on all Americans, argue that this is a necessary step to reducing projected federal deficits. But, as Edward Lazear, former chairman of the President’s Council of Economic Advisors, explains in The Wall Street Journal, this creates a false choice between huge deficits or tax increases. He …
As Congress returns to Washington next week, the fight over the Obama Tax Hikes has already begun. President Obama has indicated that he plans to allow taxes to rise while also announcing a new “stimulus” that even some in the White House refuse to promise will stimulate the economy. The Winston Group has created a new video contrasting President Obama’s positions on taxes with that of another president who understood the importance of keeping taxes low: President John F. Kennedy. As we explained in our own video last month, the …
In a recent editorial somewhat misleadingly entitled “A Real Debate on Taxes,” The New York Times argues in favor of allowing the 2001 and 2003 tax cuts to expire for Americans of all income levels. Their argument presents a few fatal flaws. First, a real debate on taxes is also a real debate on the current and projected skyrocketing levels of federal spending. Instead, the Times asserts that “more Americans—and not just the rich—are going to have to pay more taxes” in order to address looming deficits. The Times may …
The leftist majority in Congress likes to blame their trillion-dollar budget deficits on the Bush tax cuts of 2001 and 2003, but The Heritage Foundation’s Brian Riedl disagrees. Brian’s research has been the subject of contentious debate, with the Center on Budget and Policy Priorities (CBPP) responding directly to his claims. Riedl has since picked apart every one of the CBPP’s points. Now you can listen to Brian discuss his research in the latest Heritage in Focus podcast: listen here. To receive weekly updates with Heritage in Focus podcasts, and hear …
In the battle over the extension of the 2001/2003 tax cuts, a lot of myths about the tax cuts are being perpetuated. One of the common myths is that the Bush tax cuts disproportionately favored the wealthy, shifted the burden of taxes from the rich to the middle class, and made our tax system less progressive than most wealthy nations. First, although there was a slight shift of burden to the middle class immediately after the 2001 tax cuts were passed, as the higher earners (and businesses) grew their savings, …
Bill Gale’s discussion of the five myths about the Bush tax cuts was an unusually slanted piece from a normally straight-shooting liberal economist. With respect to an old friend, a little further myth busting is called for. Tax Relief as Stimulus Gale refers to the proposition that extending the tax relief “would be a good way to stimulate the economy” as a myth. In doing so, he conveniently erects a bit of a straw man. Continuing current policy cannot add much to stimulus except by erasing a debilitating source of …
Congress has an important decision to make before the end of the year: Extend the 2001 and 2003 tax cuts or allow them to expire and significantly raise taxes. There is never a good time to raise taxes because higher taxes always come with a steep cost: slower economic growth, fewer jobs and lower wages. To raise taxes now while the unemployment rate lingers at 10 percent is simply reckless and irresponsible. Some like Ed Schultz of MSNBC’s the Ed Show claim that keeping the tax cuts in place won’t …
Yesterday on ABC’s This Week, host Christiane Amanpour asked Speaker Nancy Pelosi (D-CA): “You are, by all accounts, one of the most — if not the most — powerful and successful speakers of — in the history of the United States. You’ve passed so much legislation. The President was elected with a significant majority. You had control of both houses of Congress. And yet now, people are talking about you might lose your majority in the House. The gap seems to be growing wider between what’s achieved and what’s making …
