Tags: art | laffer | Taxing | Rich | Kill | Recovery

Laffer: Taxing Rich Will Kill Recovery

Monday, 02 Aug 2010 09:02 AM

Economist Arthur Laffer says that the Obama administration's desire to increase taxes on the wealthiest Americans is ultimately self-defeating and will lead to lowered economic growth.

“Sadly, in the debate over whether to extend the 2001 and 2003 tax cuts … there is a false presumption that higher tax rates on the top 1 percent of income earners will raise tax revenues,” Laffer writes in The Wall Street Journal.

The fact is, Laffer says, that lower tax rates increase tax revenues.

“Anyone who is familiar with the historical data available from the IRS ... knows that raising income tax rates on the top 1 percent of income earners will most likely reduce the direct tax receipts from the now higher taxed income-even without considering the secondary tax revenue effects, all of which will be negative,” Laffer says.

"And who on Earth wants higher tax rates on anyone if it means larger deficits?"

Tax cuts enacted since 1978, Laffer notes, increased tax revenues from the top 1 percent of income earners.

Income tax receipts from the bottom 95 percent of income earners, on the other hand, fell from 5.4 percent to 3.2 percent of GDP during the same time period.

Reuters reports that House of Representatives Speaker Nancy Pelosi wants a vote before November elections on whether to extend tax cuts for those with annual income over $250,000 a year.

"The tax cuts for the wealthiest ... were the Bush initiative," Pelosi said on ABC's "This Week.”

"I don't see any reason why we should renew a tax cut that only gives a tax cut to the wealthiest people in America, increases the deficit, and doesn't create jobs," Pelosi said.

"That doesn't make any sense."

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Economist Arthur Laffer says that the Obama administration's desire to increase taxes on the wealthiest Americans is ultimately self-defeating and will lead to lowered economic growth. Sadly, in the debate over whether to extend the 2001 and 2003 tax cuts … there...
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Monday, 02 Aug 2010 09:02 AM
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