Sunday, August 8, 2010

Obama's Proposal To Raise Capital Gain And Dividend Taxes Will Retard US Economic Growth

From "Fairness and the Capital Tax Fetish. No serious economist thinks higher dividend and cap gains taxes are efficient ways to raise revenue" by Glenn Hubbard, dean of Columbia Business School, and a former chairman of the Council of Economic Advisers under President George W. Bush:
low [capital gain and dividend] tax rates encourage capital accumulation, productivity and wage growth.
Deficit reduction is a legitimate object of concern. But if this concern is the dominant one, I am aware of no serious analysis that would claim smaller costs to the economy—in lost output and foregone economic growth—of raising capital income taxes as opposed to increasing other taxes or limiting deductions or reducing federal spending.

If President Obama is interested in promoting growth now and in the future, he should commit to retaining the low tax rates Congress passed in 2003.
Read the entire Wall Street Journal article here.

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