Obama to continue crippling economy with ideology
It looks as if President Barack Obama and congressional Democrats are going to miss out on the single biggest policy opportunity for the U.S. this year because of their ideological resistance to the idea that lower rates can increase revenue, also known as the Laffer curve.
By Kevin Hassett at Bloomberg.com
EXCERPTS:
A careful reading shows that Obama conditioned his support for tax reform on revenue neutrality — that is, no net loss or gain in what the federal government collects in taxes.
If there were any doubts about the administration’s position, they were put to rest last week by Treasury Secretary Timothy Geithner, who said, “We’re not going to ask Americans to pay higher taxes so we can lower taxes on businesses.”
Obama and Geithner must not understand the fix our country is in.
Corporate taxes “are the most harmful type of tax for economic growth,” according to a November 2010 report by the Organization for Economic Cooperation and Development.
In the World Bank-supported “Doing Business 2011” report, the U.S.’s worst ranking by far was in the category called “paying taxes” — 62nd out of 183 economies, tied with Uganda.
Political reflex might lead Democrats to ignore the evidence that lowering the corporate tax rate increases revenue. If so, too bad, because we’ll leave free money on the table.
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