Expiration of the Bush-era tax cuts for annual incomes above $250,000 in a weak economy will translate to layoffs, Sen. Jim DeMint claimed Tuesday on CNBC.
“The issue is it’s a quarter of America's work force working for those people who are likely to get a pink slip, at least some of them, when the president gives them a new tax bill, so the president is focused on the things that are going to hurt jobs almost every time he’s opening his mouth,” he said on “The Kudlow Report.” “He’s playing politics to try to distract attention from his impact on our economy.”
President Obama recently announced that he would seek to extend the so-called Bush tax cuts only for the first $250,000 of income.
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“The top 2 percent of Americans are paying the highest proportion of national taxes of any country in the world. If we want to talk about fairness, we need to look at a simple flat tax rate,” said DeMint, R-S.C “Republicans want to keep the current tax rates the same until we can replace them with a simple flat rate, with a new president and hopefully a new Senate.”
Economist Austan Goolsbee disagreed.
“If you thought cutting high income people’s taxes is a great magic elixir, then you have to explain why it didn’t work when George Bush did it following the recession in 2001 and why it did not destroy the economy when Bill Clinton raised exactly the taxes by exactly the amount that we’re talking about in 1993, and all of the the same people said that’s going to destroy the economy and destroy job creation. It’s ridiculous. It’s not the case,” he said. “We learned again and again that what it leads to is bubbles and unsustainable growth.”
As evidence, Goolsby, a professor of economics at The University of Chicago’s Booth School of Business and a former chairman of the Council of Economic Advisers, cited recent tax rates.
“If you look at the top 400 earners in the country, the tax rate that they pay as a share of their income has been cut in half over the last 14 years, so there is no evidence that cutting high income people’s taxes by trillions of dollars, as Mitt Romney is proposing, leads to significant job creation,” he said.
"The Kudlow Report" airs weeknights at 7 p.m. ET.
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