Tuesday, November 13

Increasing tax rates on incomes over $250,000/year has almost no impact on the economy

The Congressional Budget Office has found that increasing tax rates on incomes over $250,000/year has almost no impact on the economy:
"Extending all expiring tax provisions other than the cut in the payroll tax and indexing the AMT for inflation—except for allowing the expiration of lower tax rates on income above $250,000 for couples and $200,000 for single taxpayers—would boost real GDP by about 1¼ percent by the end of 2013. That effect is nearly as large as the effect of making all of those changes in law and extending the lower tax rates on higher incomes as well (which CBO estimates to be a little less than 1½ percent, as noted above), primarily because the budgetary impact would be nearly as large (and secondarily because the extension of lower tax rates on higher incomes would have a relatively small effect on output per dollar of budgetary cost)."
This affirms a previous study by the Congressional Research Service. Bad news for GOP propaganda.

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