Nonpartisan research: tax cuts don't stimulate


	Nonpartisan research: tax cuts don't stimulate

masbury

2-10-2009 10:08 PM

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tags:

crs, tax cuts, stimulus

masbury says:

Nonpartisan Congressional Research Service: "Most evidence does not suggest that business tax cuts would provide significant short-term stimulus." What manufacturer would want a tax cut to expand when recession has created overcapacity?

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/7dda866b-ff22-4589-8930-b87e7fdc35ec/9097A97E-B6FC-4626-A276-0CB33AFC4064/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.motherjones.com/mojoblog/archives/2009/02/12200_house_gop_stimulus_tax_cuts_crs.html" href="http://www.motherjones.com/mojoblog/archives/2009/02/12200_house_gop_stimulus_tax_cuts_crs.html" style="font-size: 11px;">www.motherjones.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.motherjones.com/mojoblog/archives/2009/02/12200_house_gop_stimulus_tax_cuts_crs.html">Congressional Research Service</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.motherjones.com/mojoblog/archives/2009/02/12200_house_gop_stimulus_tax_cuts_crs.html">report from January 23 of this year called <A href="http://www.motherjones.com/mojoblog/R40104_20090123.pdf">"Economic Stimulus: Issues and Policies"</A> [pdf] makes it clear that the GOP's talking points place ideology over good economics. "Economists generally agree that spending proposals are somewhat more stimulative than tax cuts since part of a tax cut may be saved by the recipients," says the report. "The primary way to achieve the most bang for the buck is by choosing policies that result in spending, not saving. Direct government spending on goods and services would therefore lead to the most bang for the buck since none of it would be saved."</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.motherjones.com/mojoblog/archives/2009/02/12200_house_gop_stimulus_tax_cuts_crs.html">"The effectiveness of tax cuts also depends on their nature... tax cuts received by lower income individuals are more likely to be spent."</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.motherjones.com/mojoblog/archives/2009/02/12200_house_gop_stimulus_tax_cuts_crs.html">Most evidence does not suggest that business tax cuts would provide significant short-term stimulus</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.motherjones.com/mojoblog/archives/2009/02/12200_house_gop_stimulus_tax_cuts_crs.html">This lack of effectiveness may occur because</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.motherjones.com/mojoblog/archives/2009/02/12200_house_gop_stimulus_tax_cuts_crs.html">stimulus is generally provided during economic slowdowns when excess capacity may already exist</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/9097A97E-B6FC-4626-A276-0CB33AFC4064/blog/" title="blog or email this clip"><img src="http://content9.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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