Wednesday, November 17, 2010

No, Virginia, Raising Marginal Tax Rates Won't Kill Growth

In talking about the budget, I have mentioned that taxes have to increase. Some people would argue this will kill growth. I hate to break it to you, but raising marginal tax rates a few percentage points is pretty minor. Barry over at the Big Picture debunked this line of thought a little bit ago.

Here are the links.

Link 1

Link 2

In talking about raising taxes, I am not talking about jacking rates up a gazillion percent. I am talking about raising them 3-4% on top earnings and increasing the amount of income subject to social security tax.

I should also add -- no one has ever produced a real world laffer curve -- that is, no one has even been able to take the US economy, its population and tax rates and determine where the optimum rate of taxation is based on Art Laffer's "logic." As such, I put it down in the pure crappola bin.