An exchange between Bloomberg Businessweek and University of Chicago economist and former Obama adviser Austan Goolsbee includes the following item:
Does the capital-gains rate go higher at the end of the year? What does Obama have to do to assure people there’s some predictability?
I think the data does not support the idea that tax cuts on high incomes are the main drivers of growth. So I don’t think uncertainty over what the tax rate will be for somebody who makes a million dollars a year has that big of an impact on the economic growth rate. I think the only thing we can be guaranteed for this coming year is a whole lot of gridlock. If that adds uncertainty, I don’t know that there’s a lot we can do about it.
Note first that Goolsbee starts his answer by completing sidestepping the question.
More important, though, is that Goolsbee attacks a straw man. Where in the question is the argument that “tax cuts on high incomes are the main drivers of growth”? Nowhere.
Goolsbee ignores a more relevant issue that is implied in the question: the impact of tax hikes on growth. Rather than make a case that a tax hike will not hurt economic growth, he offers an irrelevant point about tax cuts. Perhaps he needs to re-examine the evidence about the impact of higher marginal tax rates.
