Non-Partisan Congressional Tax Report Debunks Core Conservative Economic
Theory-GOP Suppresses Study

From Forbes Magazine:

What do you do when the Congressional Research Service, the completely
non-partisan arm of the Library of Congress that has been advising
Congress—and only Congress—on matters of policy and law for nearly a
century, produces a research study that finds absolutely no correlation
between the top tax rates and economic growth, thereby destroying a key
tenet of conservative economic theory?

If you are a Republican member of the United States Senate, you do
everything in your power to suppress that report—particularly when it
comes less than two months before a national election where your
candidate is selling this very economic theory as the basis for his
candidacy.

Initially released on September 14, 2012, the study—authored by Thomas
Hungerford who is a specialist in public finance at the
C.R.S.—correlated the historical fluctuations of the highest income tax
rates and tax rates on capital gains dating back to World War II with
the economic growth (or lack of the same) that followed.

The conclusion?

Lowering the tax rates on the wealthy and top earners in America do not
appear to have any impact on the nation’s economic growth.

This paragraph from the report says it all—

“The reduction in the 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.”

These three sentences do nothing less than blow apart the central tenet
of modern conservative economic theory, confirming that lowering tax
rates on the wealthy does nothing to grow the economy while doing a
great deal to concentrate more wealth in the pockets of those at the
very top of the income chain.

Not surprisingly, the results of the study caught the attention of a
great many conservatives—so much so that, according to a New York Times
piece, Republican’s in the United States Senate successfully pressured
the Congressional Research Service to withdraw the report shortly after
it was released. The withdrawal came over the objection of the CRS
economic team and the author of the study.

The Times further reports that, according to Senate Minority Leader
Mitch McConnell’s spokesperson, Senator McConnell—along with additional
GOP senators— “raised concerns about the methodology and other flaws,”
adding that additional people outside of Congress were also criticizing
the study.

The nature of these alleged flaws?

That the report included terms such as “the Bush tax cuts” and
references to “tax cuts for the rich.”

Added Antonia Ferrier, spokesperson for the Republican members of the
Senate Finance Committee, “There were a lot of problems with the report
from a real, legitimate economic analysis perspective. We relayed them
to C.R.S. It was a good discussion. We have a good, constructive
relationship with them. Then it was pulled.”

While a spokesperson for the C.R.S. refused to comment on the
discussions between the Senate Republicans and her agency, she did
confirm that the report was no longer in ‘official circulation’.
However, the New York Times reports that a source requesting anonymity
confirmed that the decision to pull the study was done against the
advice of the economics division and that the author, Mr. Hungerford,
stood by the report’s findings.

On Thursday, Senate Democrats republished the study following a letter
sent to the C.R.S. by the ranking Democratic tax expert in the House,
Rep. Sander Levin (D-MI), which reads, in part—

“I was deeply disturbed to hear that Mr. Hungerford’s report was taken
down in response to political pressure from Congressional Republicans
who had ideological objections to the report’s factual findings and
conclusion. It would be completely inappropriate for CRS to censor one
of its analysts simply because participants in the political process
found his or her conclusion in conflict with their partisan position. I
would like your explanation as to why this report was removed from the
CRS website, who made that decision and what considerations led to it.”

For almost 100 years, the Congressional Research Service has worked to
assist Congress by providing well-researched and accurate data to be
utilized in the creation of important public policy. It has done so
when Congress was controlled by Democrats and when Congress has been
under the control of Republicans. No matter what party was in charge,
the C.R.S. has always endeavored to keep politics out of their work in
the effort to provide data that would inform and advance our public policy.

Apparently, solid, well researched data no longer matters—at least not
when it comes to the Congressional Republicans.

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On 12/2/2013 5:14 PM, F.O.A.D. wrote:


Non-Partisan Congressional Tax Report Debunks Core Conservative Economic
Theory-GOP Suppresses Study

(parts snipped for brevity)


The conclusion?

Lowering the tax rates on the wealthy and top earners in America do not
appear to have any impact on the nation’s economic growth.

This paragraph from the report says it all—

“The reduction in the 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.”



Funny how these statements can be interpreted.

It basically says that the rate of taxation on "upper earners" has
nothing to do with the economic growth of the nation. That means high
rates or low rates to me.

If the nation is in the middle of a deep recession with high
unemployment that has lasted over 5 years, what the heck to you expect
the "numbers" to say in terms of income distribution?

The fix isn't to tax upper earners more or less. The fix is to generate
jobs for everyone else.

On Mon, 02 Dec 2013 17:14:14 -0500, "F.O.A.D." wrote:

No matter what party was in charge,
the C.R.S. has always endeavored to keep politics out of their work in
the effort to provide data that would inform and advance our public policy.

===

If they were endeavoring to keep politics out of their work, why did
they choose to use inflamatory language such as "tax cuts for the
rich" and "the Bush tax cuts"?

"Rich" is highly subjective and is frequently used by you and your
political brethren as a code word for "someone who has more money than
I do". Envy should not be the basis for fiscal policy.

wrote:
On Mon, 02 Dec 2013 17:14:14 -0500, "F.O.A.D." wrote:

Lowering the tax rates on the wealthy and top earners in America do not
appear to have any impact on the nation’s economic growth.

I am not sure the effective tax rate has actually changed for several
decades. They lower the rates and remove some loopholes. Raise the
rate and add some loopholes.
The uber rich still pay diddly.
OTOH the working class doesn't pay at all.

I would support a 5% across the board hike on everyone.
The only way I would do it is if we simply froze spending at current
levels instead of going up every year

How about getting rid of Base Line Budgeting right now. Then they can not
say they are lowering spending, while actually increasing the outgo!

wrote:
On Mon, 02 Dec 2013 18:31:12 -0600, Califbill
wrote:

wrote:
On Mon, 02 Dec 2013 17:14:14 -0500, "F.O.A.D." wrote:

Lowering the tax rates on the wealthy and top earners in America do not
appear to have any impact on the nation’s economic growth.

I am not sure the effective tax rate has actually changed for several
decades. They lower the rates and remove some loopholes. Raise the
rate and add some loopholes.
The uber rich still pay diddly.
OTOH the working class doesn't pay at all.

I would support a 5% across the board hike on everyone.
The only way I would do it is if we simply froze spending at current
levels instead of going up every year

How about getting rid of Base Line Budgeting right now. Then they can not
say they are lowering spending, while actually increasing the outgo!

I agree, they need to start justifying what they spend every year
instead of starting with what they spent last year as a given and
justifying the increase they want.

Actually now they start with around a 13% increase! and go from there.

On 12/2/2013 6:14 PM, wrote:
On Mon, 02 Dec 2013 17:14:14 -0500, "F.O.A.D." wrote:

Lowering the tax rates on the wealthy and top earners in America do not
appear to have any impact on the nation’s economic growth.

I am not sure the effective tax rate has actually changed for several
decades. They lower the rates and remove some loopholes. Raise the
rate and add some loopholes.

The uber rich still pay diddly.

Hmm.. the upper 10% pay 70% of the taxes.

Top 25% pay 87.5% of the taxes.



OTOH the working class doesn't pay at all.

Bottom 50% pay 2.25% of the taxes.


I would support a 5% across the board hike on everyone.
The only way I would do it is if we simply froze spending at current
levels instead of going up every year

I support a 5% across the board spending cut on all programs.
And then again next year.
Mikek