Sunday, August 21, 2011

1% Tax Increase Will Reduce Gross Domestic Product 3%

Christina Romer, who was chairman of Mr. Obama's Council of Economic Advisors, has done some research on the impact of tax increases, and concluded that increasing taxes by one percent of GDP for deficit-reduction purposes leads to a three-percent reduction in gross domestic product.

If you believe that economic growth is the only thing that can fix budget deficits and create massive numbers of new jobs, talk of new tax increases, by any other name, is depressing.

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