Why Raising Taxes Is Good for Us
On Sunday’s Meet the Press, Speaker John Boehner suggested that lowering tax rates is the best solution toward economic recovery.
Host David Gregory retorted: "There’s no iron-clad evidence that lowering marginal tax rates is going to lead to economic growth."
This conservative tax policy did not work for the nation during the Bush administration, and it is not going to solve our current economic problems. Boehner correctly said, “we can’t cut our way to prosperity.” The current spending cuts are cutting twice as much as the country is growing. Boehner backpedalled with the notion that lower tax rates are the pathway to promote economic growth.
“We’ve got to find a way through our tax code to promote more economic growth in our country," Boehner said. "We can do this by closing loopholes, bringing the rates down for all Americans, making the tax code fairer—it will promote more economic growth.”
During the nation’s most prosperous times, the marginal income tax rate was much higher than its current 39.6 percent. Both the Reagan and Clinton administrations raised the tax rates, which accelerated economic growth. Since the 1950s, lower tax rates have actually destabilized the nation’s economy rather than restored it.
Lowering the marginal income tax rate will be especially dangerous with the sequester in affect. Boehner was one of the Republicans that advocated against the widespread spending cuts. He recognized that the cuts would devastate military and middle-class families.
However, in Sunday’s interview, his discontent for the sequester was not as dramatic as it was in the weeks leading up to March 1.
"I don't know whether it's going to hurt the economy or not," he said. "I don't think anyone quite understands how the sequester is really going to work."
Though he is correct in saying that it's difficult to foresee exactly how the cuts will affect the economy, the fact is that these widespread cuts will seriously impact lower and middle class families and young people. Projected estimates show the nation is set to lose about 2 million jobs and young Americans, already suffering from high unemployment, would take a large portion of this hit. Our economy is still fragile. Lowering the tax rate would only exacerbate our economic and fiscal woes.
Amber Pace is a Policy and Research Intern with Campus Progress.
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