This morning, Fed Chair Ben Bernanke spoke on health care at the Senate Finance Committee Health Reform Summit. His prepared remarks cited the extraordinary growth of health care spending as unsustainable, but he cautioned against harming innovation amidst the efforts to curtail health care costs.
Will increasing tax rates on the rich increase revenues, as Barack Obama hopes, or hold back the economy, as John McCain fears? Or both?
Mr. Hauser uncovered the means to answer these questions definitively. On this page in 1993, he stated that "No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP." What a pity that his discovery has not been more widely disseminated.
You'd better believe we pay careful attention to capital gains here. Friday, the Congressional Budget Office released an analysis of the rise and fall of federal individual income tax revenues from 1994 through 2004. It showed that capital gains accounted for half of the non-legislative changes to individual income tax revenues over the period. Ironically, capital gains revenues increased 0.7% of GDP from 1994 through 2000 under President Clinton, and they fell 0.6% of GDP from 2000 to 2004 under President Bush.
Brad DeLong would probably say that Bruce is being shrill in this piece.
Possibly... But it's hard to argue with what he's saying.
FYI...Bruce sat between Andrew and me at the Committee for a Responsible Budget dinner we talked about several weeks ago. I think he was the one who was the first to looked extremely pained when former OMB Director Jim Miller said all tax cuts paid for themselves. Here, here, and here is what we said.
Last week, while campaigning in Pennsylvania in anticipation of Tuesday's primaries, John McCain unveiled his economic plan with this as the objective:
Today In Pennsylvania, John McCain Outlined A Pro-Growth, Pro-Jobs Strategy To Get Our Economy Back On Track. John McCain's strategy includes taking the near-term actions needed to provide immediate help to American families while also taking the longer-term steps necessary to secure America's economic prosperity and leadership in the world.
The strategy excludes any mention of fiscal responsibility per se, confirming our earlier suspicions that is is not a top line priority. For this transgression, Pete and Stan will have a lot to say in their posts.