November 6, 2012
By BRUCE BARTLETT
Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take.”
On Sept. 14, the nonpartisan Congressional Research Service published a report, one of hundreds it puts out every year, titled “Taxes and the Economy: An Economic Analysis of Top Tax Rates Since 1945.” Although the C.R.S. reports are not released directly to the public, they tend to leak out within days. The New York Times posted this one on the Economix blog on Sept. 15 because of its provocative conclusions.
In essence, the report, written by the economist Thomas L. Hungerford, who has a Ph.D. in economics from the University of Michigan, concluded that changes in the top statutory tax rate and the rate on capital gains had no discernible effect on economic growth in the period since 1945. It noted that the top rate was over 90 percent in the 1940s and 1950s, 70 percent in the 1960s and 1970s, 50 percent during most of the 1980s and has been below 40 percent ever since.
These changes were correlated with various measures of saving, investment, productivity and gross domestic product growth. No relationship could be found.
-----
Tax cuts for the rich and for corporations are the core Republican idea for how to jump-start growth. That is why Mr. Romney proposes to keep the 15 percent tax rates on dividends and capital gains permanently and drop the top statutory rate to 28 percent, as well as to reduce the corporate tax rate to 25 percent from 35 percent.
Therefore, the Congressional Research Service report was a political threat that Republicans had to quash – and fast, with the election looming. According to an article in The New York Times on Nov. 2, a number of Senate Republican offices complained to the head of the C.R.S. about the report and succeeded in having it taken down from its internal Web site, accessible only by those within Congress.
-----
Getting the report withdrawn smacks of censorship. Andrew Rosenthal, editor of The New York Times’s editorial page, commented, “Congressional Republicans seem to think that the C.R.S. should function like Pravda.” Pravda was, of course, the official organ of the Soviet Communist Party.
The irony is that the Republican effort to quash the report has led to it getting vastly more attention than if they had simply ignored it. Censorship has a funny way of doing that.
No comments:
Post a Comment