Larry Summers: Tax increases won’t hurt economy
Here is Obama economic guru Larry Summers at the Economic Club of New York: “I don’t find there to be much evidence that suggests that raising top marginal tax rates from 35 to 39 percent that will be implicit in the repeal of the Bush tax rates will do substantial damage to incentives in the economy.”
1) Remember that the 1993 Clinton tax increases — the Bush tax cut expiration would restore some of those rates – -happened when the economy had been growing briskly since the 2Q 1991. A very different situation today.
2) Here is WH CEA Chair Christina Romer’s take on higher taxes when she was a econ prof at Berkeley: “Tax increases appear to have a very large, sustained, and highly significant negative impact on output … [and] that tax cuts have very large and persistent positive output effects.”
3) This tax increase would be in addition to possible healthcare and energy taxes.