Can a Small Change in Congress Help Spur Economic Growth and Save Taxpayers Money?

Posted by Tina

Republican gains in the House and Senate will result in changes whether or not President obama has a phone and a pen. According to Joseph Lawler of the Washington Examiner, the Republicans plan to “…mandate that Congress’ official budget scorekeepers consider the economic growth generated by tax cuts in their official analyses ”

Democrats claim that letting the American people know how tax law impacts our economic growth is a bad thing. I’m not surprised since deception and witholding accurate information is how radical democrat radicals have pushed their big government, diminished-middle-class agenda for years. As we have seen under the extreme progressive leadership of Obama, Pelosi, and Reid, when Democrats rule over the people the rich get megga-wealthy (1%) while the middle class is decimated and the numbers joining the ranks of the needy increase.

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4 Responses to Can a Small Change in Congress Help Spur Economic Growth and Save Taxpayers Money?

  1. Chris says:

    “According to Joseph Lawler of the Washington Examiner, the Republicans plan to “…mandate that Congress’ official budget scorekeepers consider the economic growth generated by tax cuts in their official analyses ””

    Of course, both the Congressional Budget Office and the Congressional Research Service have done extensive analyses on the economic growth generated by tax cuts.

    They couldn’t find any.

    http://www.nytimes.com/2012/11/02/business/questions-raised-on-withdrawal-of-congressional-research-services-report-on-tax-rates.html

    http://news.firedoglake.com/2012/11/08/cbo-joins-crs-in-finding-almost-no-economic-impact-from-letting-high-end-bush-era-tax-rates-expire/

    “Democrats claim that letting the American people know how tax law impacts our economic growth is a bad thing.”

    Not true. On the contrary, it was Republicans who tried to suppress the CRS study because they didn’t like the results.

  2. Tina says:

    Kudos to the NYT for actually featuring a balanced article. I guess the new owners have taken complaints about progressive bias seriously. I do wonder if Chris read the article that features a “nonpartisan” report that includes words and phrases that are definitely partisan and biased:

    Mr. McConnell presented a bill of particulars to the research service that included objections to the use of the term “Bush tax cuts” and the report’s reference to “tax cuts for the rich,” which Republicans contended was politically freighted.

    They also protested on economic grounds, saying that the author, Thomas L. Hungerford, was looking for a macroeconomic response to tax cuts within the first year of the policy change without sufficiently taking into account the time lag of economic policies. Further, they complained that his analysis had not taken into account other policies affecting growth, such as the Federal Reserve’s decisions on interest rates.

    The report was pulled for obvious legitimate reasons.

    If an assertion is made you can be sure someone will come out with a study to debunk it (politically).

    The left has been trying to kill supply side economics at least since the 1980’s when the supply side policies of Ronald Reagan spurred incredible growth that rescued AMERICA from the malaise of the Jimmy Carter years.

    Our readers can find many liberal opinions on the web since the study referenced in the NYT was published with headlines claiming tax cuts do not lead to economic growth. Recorded history tells a different story.

    Those interested in becoming fully educated and informed will appreciate analysis that offers hope of real relief from the miserable economy of last six years. Remember, the recovery occurred in Spring 2009 and all of the low growth and loss of opportunity since then has been a result of progressive policies, including added taxes, high uncompetitive tax rates on corporations, and massive new (costly) regulation:

    a preview of George Gilder’s – Knowledge and Power, The Information Theory of Capitalism and How It is Revolutionizing Our World, rebuts the above mentioned report (scroll down to PG 21- you might have to buy the book :-)).

    AEI-“Let’s Not Forget the Decade the Liberals Love to Hate, The 1960s and President Kennedy’s successful, supply-side tax cuts”

    Reform Taxes to Spur Economic Growth, Heritage

    Maine’s Biennial
    Budget: Tax Cuts to Spur Job Growth
    and a follow up report.

    Republican governors all across America have improved their states economic status through policies including tax cuts. Republican Governors Discuss Economic Growth and Education, The Aspen Institute:

    Wisconsin Gov. Scott Walker noted that his administration has reduced the tax burden by $2 billion (the state’s lowest rate is 4 percent), while neighbor Illinois has raised taxes dramatically. Meanwhile, Wisconsin was recently named the 14th best state in the country to do business, while Illinois ranked a dismal 48th, he said. …

    Florida Gov. Rick Scott said that he inherited a state with a $3.5 billion deficit. His administration cut taxes 40 times — last year by $500 million — invested in tourism, and recruited companies to the state, adding hundreds of thousands of jobs. Florida now has $3 billion in a “rainy day fund,” he added. “So tax cuts work.”

    South Carolina Gov. Nikki Haley said that unemployment went from 11.1 percent in 2011 to 5.3 percent now, the lowest in the state’s history. Like her Republican colleagues, she touted job skills training and STEM education as part of the formula, as well as attracting businesses to South Carolina, which is a heavy manufacturing state. Haley pointed to public assistance as an area where her administration has implemented creative changes.

    “Everyone is negative about welfare, so we changed things,” Haley said. “DC says when somebody comes into the welfare office, check a box and hand them check. When we check the boxes, we say, ‘What do you do? What are you good at? What’s your skill set? By asking those extra questions, we have taken over 20,000 people off welfare and put them into jobs.”

    Republicans and Democrats have seen supply side economic work and Republican governors are once again demonstrating better results in their states than those states that agree with the big government progressive high tax model.

    It’s a very good idea to have the CBO include in their analysis of congressional budgets and policy how tax cuts effect economic growth, the people have a right to know.

  3. Chris says:

    Good for you for actually addressing the methodology of a study! I’m genuinely proud.

    I’ll have to look into whether the study fails to take lag into account. I disagree that “Bush tax cuts” and “tax cuts for the rich” are politically charged terms, though.

    I think it’s significant that the CBO has come to the same conclusions as the CRS:

    http://news.firedoglake.com/2012/11/08/cbo-joins-crs-in-finding-almost-no-economic-impact-from-letting-high-end-bush-era-tax-rates-expire/

    But again I appreciate that you addressed the methodology of the study and I think some of your critiques are worth looking into.

  4. Tina says:

    I hope you will look into lag time since the real world affect of lowering taxes takes time to develop. The CBO can only score and form opinion with the terms given them. One year doesn’t work. Simple common sense tells us it takes time for businesses to put things in motion, begin to fill new orders, develop and build a new business…and for people to begin to spend the extra dollars they suddenly find at their disposal. Business builds on business and over time things are humming along., its wonderful to see.

    Scroll down at the link to Dr. J. D. Foster for his take on the Clinton/Gingrich tax package:

    Following the [Clinton] tax hike, the economy performed reasonably well, but not as well as one would expect given the conditions at the time. The real economic boom came later in the decade, just when the economy should have slowed as it made the transition from a period of recovery to normal expansion. Further, this acceleration coincided to a remarkable degree with the 1997 tax cut. . . .

    In 1997, the Republican-led Congress passed a tax-relief and deficit-reduction bill that was resisted but ultimately signed by President Clinton. The 1997 bill:

    * Lowered the top capital gains tax rate from 28 percent to 20 percent;

    * Created a new $500 child tax credit;

    * Established the new Hope and Lifetime Learning tax credits to reduce the after-tax costs of higher education;

    * Extended the air transportation excise taxes;

    * Phased in an increase in the estate tax exemption from $600,000 to $1 million;

    * Established Roth IRAs and increased the income limits for deductible IRAs;

    * Established education IRAs;

    * Conformed AMT depreciation lives to regular tax lives; and

    * Phased in a 15 cent-per-pack increase in the cigarette tax. . . .

    In 1995, the first year for which these data are available, just over $8 billion in venture capital was invested. Venture capital is especially critical to a vibrant economy because high-risk/high-return investment permits promising new businesses to blossom, rapidly spreading new technologies and new ideas into the marketplace and across the economy. Such investments, when successful, generate returns to investors that are subject primarily to the tax on capital gains. By 1998, the first full year in which the lower capital gains rates were in effect, venture capital activity reached almost $28 billion, more than a three-fold increase over 1995 levels, and by 1999, it had doubled yet again. (http://www.heritage.org/Research/Taxes/wm1835.cfm)

    That’s $28 billion helping the middle class expand and create business, from people that can afford to take the risk, and not a dime is needed from the taxpayer.

    The Reagan years are also instructive.

    I appreciate your new tone and thank you for making the effort.

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