A Quote by Glenn Hubbard
I can't imagine an argument that says that raising marginal tax rates on high income people, many of whom are business owners, is a recipe for economic growth.
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Well, I think the reality is that as you study - when President Kennedy cut marginal tax rates, when Ronald Reagan cut marginal tax rates, when President Bush imposed those tax cuts, they actually generated economic growth. They expanded the economy. They expand tax revenues.
If top marginal income tax rates are set too high, they discourage productive economic activity. In the limit, a top marginal income tax rate of 100 percent would mean that taxpayers would gain nothing from working harder or investing more. In contrast, a higher top marginal rate on consumption would actually encourage savings and investment. A top marginal consumption tax rate of 100 percent would simply mean that if a wealthy family spent an extra dollar, it would also owe an additional dollar of tax.
If Republicans are correct that lower rates spur economic growth, then lower rates on all income - made possible in part by raising capital-gains rates - should bolster economic growth across the economy.
Reduced marginal tax rates on individuals and business fosters growth every time.
Here's the problem if you keep raising tax rates: You slow down economic growth.
High tax rates distort economic decision making, and our corporate income tax rate is one of the highest in the world.
Let's take the nine states that have no income tax and compare them with the nine states with the highest income tax rates in the nation. If you look at the economic metrics over the last decade for both groups, the zero-income-tax-rate states outperform the highest-income-tax-rate states by a fairly sizable amount.
The data does not support that high-income tax cuts are the main drivers of growth, so I don't think that uncertainty over what the tax rate will be for someone that makes a million dollars a year has that big an impact on the economic growth rate in the country.
If we think that high marginal tax rates are bad because they distort incentives, the same is then true for tax subsidies.
Budget deficits are not caused by wild-eyed spenders, but by slow economic growth and periodic recessions. And any new recession would break all deficit records. In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low, and the soundest way to raise the revenues in the long run is to cut the rates now.
Here's the question for my fellow Republicans: Do we want to be the first-ever GOP House majority to raise federal marginal income tax rates?
Tax cuts continue to benefit families, seniors, and small business owners, as evidenced by unparalleled economic growth in Nevada and across the country.
If there is one thing that most economists agree about in the realm of tax policy, it is that it's best to broaden the base of any tax, all else being equal. That means minimizing the number of deductions and exclusions from taxable income in order to lower marginal rates and reduce distortions.
Arthur Laffer's idea, that lowering taxes could increase revenues, was logically correct. If tax rates are high enough, then people will go to such lengths to avoid them that cutting taxes can increase revenues. What he was wrong about was in thinking that income tax rates were already so high in the 1970s that cutting them would raise revenues.
A lot of people out there working hard and finally building up to getting a pretty good income. Higher tax rates on them, you know, the income rates going up, the dividend rates are going up, the capital gains rates all going up before health care kicks in.
The marginal tax rate for high income earners is going up. Small businesses are no longer enjoying some of the exemption from payroll tax. Now there will be carbon taxes.
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