“My View” from the Nov. 12, 2012, edition of “Viewpoint with Eliot Spitzer.”
If last week was all about politics — and thankfully things turned out pretty well — maybe this week we can put ideology and partisanship aside for a moment and apply a more objective, scientific approach to some of the tough issues we face. What do historical records and data suggest might be the better course for our nation to follow? Specifically, what is the impact of increasing the top marginal tax rate on the rate of investment and job creation?
If numbers could persuade me that raising that rate injured job creation, I would reconsider my belief that the wealthy should pay more — because job creation is issue one. On the other hand, if the record established that raising the top marginal rate did not in any way injure investment and job creation, then those who have been unalterably opposed should be forced to reconsider their views as well. Analysis trumps ideology.
And we now have the analysis — a fascinating report just issued by the Congressional Research Service. The CRS is a nonpartisan entity that produces academic quality research to answer tough policy questions; its reports are put through a process of rigorous analysis before they are released. The bottom-line conclusion of the CRS report is this, and I quote:
“The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.”
The report presents the sort of analysis many of us have been discussing for years, though done much more rigorously: tax rates were at the highest when growth was at its peak, and the reduction in rates has not had any discernible impact on the types of investment that led to growth.
You can read the full report linked at our website.
Rather than acknowledge the findings, however, the Republican efforts have been directed at having the report withdrawn. It is a fascinating story in its own right — reminiscent of a different era, when news the government didn’t like was simply suppressed. But leave that for another day.
The important point here is the scientific conclusion reached by the study — raising the top tax rate to 39.6 percent will not have any of the damaging consequences that the Grover Norquists of the world suggest. A week after the political and ideological battle to support slightly higher taxes on the wealthy was won, we now also have a numbers-based analysis supporting the same course. Facts matter. And in this case, fairness wins.
That’s “My View.”