In an August 30 commentary, Pulitzer Prize winning reporter David Cay Johnston threw cold water on the idea that tax cuts will bring forth additional investment. The problem, he said, is a lack of profitable investing opportunities, not taxes.
On August 27, the President’s Economic Recovery Advisory Board sent him a report with recommendations for improving and simplifying the tax system. The Tax Policy Center’s Howard Gleckman was critical of the report for its emphasis on small fixes to a fundamentally broken tax code. Economist Diane Rogers also expressed disappointment in a September 2 post.
On August 24, Reuters and Ipsos released a poll showing that 49 percent of Americans favor extending all the Bush tax cuts—they all expire at the end of the year—31 percent would extend them for all but the wealthy, and 15 percent would allow all of the tax cuts to expire.
On August 20, CNN and Opinion Research released a poll showing that only 31 percent of Americans want all the Bush tax cuts extended. A majority, 51 percent, wants tax cuts for the rich to expire on schedule and 18 percent want all the tax cuts to expire.
In an August 16 article, University of Texas law professor Calvin Johnson urged abolition of Roth IRAs. He believes they are a very inefficient means of increasing national saving.
On August 10, the Congressional Reserve Service issued a study of the economics of the capital gains tax.
On August 7, economists Emmanuel Saez, Joel Slemrod and Seth Giertz posted a paper on the responsiveness of taxable income to change in marginal tax rates. They conclude that while tax rates are well below the revenue-maximizing rate, the tax system imposes a large deadweight cost (the economic burden over and above the tax itself), indicating a great deal of inefficiency that could be reduced by base broadening and rate reduction.
The Summer 2010 issue of the Harvard Journal on Legislation has an article by Rep. Chaka Fattah (D-PA) advocating a one percent tax on all financial transactions to replace the income tax.
I lasted posted items on this topic on August 12.
Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Read his most recent column here. Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).
