Monday, January 30, 2012

100% of Economists Agree

Northwestern University and University of Chicago’s business schools surveyed a group of top economists, as well as the public at large, and found some big differences when it came to economic policy. Some of the questions tested basic economic literary: A full 100 percent of economists agreed that permanently raising the federal tax rate by 1 percent for those in the top income tax bracket would increase federal tax revenue over the next 10 years. By contrast, only 66 percent of the general public agreed that this was the case, with just 50 percent of Republicans concurring and 80 percent of Democrats.
So there you have it. People who know something about taxation and government revenue, whether we're talking economists or the Congressional budget office, agree that raising taxes raises government revenue. This is also what you find empirically, that is, raising taxes has, historically, always raised government revenue. Why do so many Americans disagree?

I can think of two reasons. First, many people think that rich people somehow weasel out of paying taxes, which they often do, but not so well that they don't still pay a lot in tax. Second, the Republicans have been lying about this since Reagan, and they have persuaded a lot of people who dislike taxes that they really don't work. But they do work, that is, they raise money for the government, and the higher they are, the more money they raise.

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