Withdrawal of a Congressional Research Report on Tax Rates Raises Questions - NYTimes.com
Jared Sperli stashed this in economics
You can't say that!
The Congressional Research Service has withdrawn an economic report that found no correlation between top tax rates and economic growth, a central tenet of conservative economic theory, after Senate Republicans raised concerns about the paper’s findings and wording.
Wait, they can withdraw a Congressional Research Service report?!
As if it never existed?
They disappeared it.
This report is not a surprise, for two reasons:
1. There's a huge difference between a top rate of 70% (during the 1980 campaign) and a top rate of either 35% or 39.6%. Ultimately a small marginal difference is going to have a small marginal effect.
2. Most people in the top brackets are not "the rich"! For these people, earned income is not their primary source of income, capital gains is, which is taxed at 15% unless you have a moron for a tax attorney. The vast majority of earners in the top bracket are small business owners... and I don't mean Paul Ryan's $1B definition of small business either. I mean the "I risk destitution to take this chance to build a business and I'm already in the hole for the year because I'm required to amortize much of my losses and I have to pass through my LLC or Sub-S into personal income so I don't get double taxed" small business owner. These are the people who are disproportionally affected by high marginal income tax rates... And that 4.6% rate difference also won't have significant effect on 'growth' i.e. creating _new_ jobs (to a guy officially making $300k/year it's only a few grand over the course of a year), but that small amount of money, for a genuine small business owner, can mean the difference between making payroll and _not_ making payroll.
And yet these small businesses get something to the order of $125b in subsidies and grants from the government, every year, according to a friend of mine who works in the CBO.