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October 6, 2011

“Job-Killing Tax Hikes May Not be So Deadly”

An article in the September 26 – October 2, 2011 issue of Bloomberg Businessweek discusses the issue relating to wealth, “job-creators”  and tax rates.  The article takes issues with some of the political talking points because “It’s not at all clear that it’s true.” 
The discussion highlights the need to create jobs for the population other than “the rich”.  “The poor and middle class are more likely…” to spend extra money from tax savings than the rich.  Accordingly, lower tax rates for them will create more jobs quicker than reducing tax rates for the wealthy.
The growth after the Clinton increased tax rates and the 91% marginal tax rates in the 1950s “…disproves the idea tax increases are the kiss of death”.  The benefit of unpaid tax cuts, that is lower tax rates when there is a deficit, create further complexity in drawing conclusions about the impact of changes in tax rates.  
The major point of the article is captured in the last sentence: “Anyone who tells you they have conclusive results, you should be wary of.”
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