Tuesday, January 31, 2012

Democratic Think Tanks need hard factual studies on tax cuts

The Democrats need to conduct some objective studies on tax cuts. Some of the questions that need to be asked:

  1. Are tax cuts for the top tax brackets stimulative?  How does this stimulation mechanism work?
  2. Are tax incentives to businesses to hire workers more stimulative than tax cuts? 
  3. Which government programs that use tax stims work and which don't work?
  4. Advantages and disadvantages of a progressive tax system. 
The Democrats could build on the work of Mark Zandi form Moodys Analytics. We have published this table many times:

Permanent tax cuts do not appear to be stimulative at all. The Obama administration has used the payroll tax holidays for FICA payroll tax and provided refundable lump sum tax rebates.

However, the GOP approach with the Bush tax cuts and cutting corporate taxes is not effective according to Moodys. . 

The Democrats should use empirical data to attack the bad tax ideas of the GOP. Taxes are a numbers game.

Some of the work could be done by both the office of Management and Budget (OMB) and the General Accounting Office (GAO).  A Joint Report on tax effectiveness from the GAO and OMB would be interesting and tough for either political party to refute.

The GOP uses a lot of fuzzy math when they talk about taxes.

Show America the numbers!

graphic courtesy of:

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