Senior Director of Economic Policy
Senate Minority Leader Mitch McConnell (R-KY) claimed yesterday that allowing the top two income tax rates to rise to Clinton-era levels would harm the economy by discouraging high-income taxpayers from working. “Rates matter because they affect behavior. The higher the tax rate, the higher the disincentive to work,” he said. This ignores the fact that the economy and jobs grew more strongly after the Clinton tax increases than after the Bush tax cuts. Moreover:
In fact, letting the high-end Bush tax cuts expire on schedule at the end of this year would shrink gross domestic product (GDP) by just 0.1 percent in 2013.
Over ten years, letting those high-end tax cuts expire also would also shrink deficits by nearly $1 trillion over ten years, boosting national saving, private investment, and long-term economic growth.