The White House recently released a video, narrated by Austan Goolsbee of the Council of Economic Advisers, asserting that higher tax rates on the so-called rich would be a good idea.
Since Goolsbee’s video made so many unsubstantiated assertions and was guilty of so many sins of omission, here’s a rebuttal video, narrated by yours truly.
[youtube Nri1yH16168]
This new Center for Freedom and Prosperity video includes the full footage of the White House production, so viewers can decide for themselves which side is correct.
This rebuttal video, incidentally, only scratches the surface. There was not enough time to cite the wealth of data and research showing how higher taxes undermine economic performance. There was not enough time to address some of the additional flaws of class-warfare tax policy. And there was not enough time to show how simple it is to balance the budget without higher taxes.
Given the time constraints, the video highlights three fundamental flaws in Goolsbee’s presentation.
1. The economy is not a fixed pie. Notwithstanding all evidence, there is a near-religious view on the left that the rest of us somehow must have less if a rich person earns more. The video highlights important evidence on income mobility and economic growth.
2. There is a Laffer Curve. Folks on the left assume that higher tax rates have no impact on economic performance. Not surprisingly, there is widespread evidence that taxpayers are very responsive to changes in tax rates. Using IRS data, the video explains what happened with tax collections from the rich during the Reagan years.
3. Keynesianism is wrong. The Obama Administration has a simplistic Keynesian approach to fiscal policy. As such, they only think tax cuts help growth if people rush out and spend the money. Yet this was the same rationale for the failed stimulus, and the video shows how unemployment is far higher than the White House promised.
Pelosi and Reid will convene a lame-duck session next week and taxes will be one of the key issues since the 2001 and 2003 tax cuts will expire at the end of the year without further action. The White House is willing to keep some of those tax cuts, but they want higher tax rates on the rich. Goolsbee’s video shows that the Obama Administration has a very weak argument.
Comment count on this article reflects comments made on Breitbart.com and Facebook. Visit Breitbart's Facebook Page.