Varsity-Packet-Final

Often these entrepreneurs will start a new company

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: eases Hurt the Economy [____] [____] Tax increase will cause substantial economic harm William W. Beach, Director of the Center for Data Analysis at The Heritage Foundation, 2010 (September 20, “Obama Tax Hikes: The Economic and Fiscal Effects,” http://www.heritage.org/research/reports/2010/09/obama-tax-hikes-the-economic-and-fiscal-effects) Bad economic news is mirrored by several other key economic indicators: ▪ Business investment would fall every year of the 10-year period by an average of $33 billion below the level it would be without the tax hikes; ▪ Investment in residences would also fall by an average of $13 billion each year; ▪ Personal savings would decrease by $38 billion in 2011 alone, and savings by Ame ricans would continue below baseline for each of the following four years; ▪ Total disposable lost income after subtracting inflation would equal $726 billion for the 10 -year period; and ▪ Lost consumer spending after inflation would equal $706 billion over th is time period. In short, the economic harm is significant and widespread. Individuals and households throughout the income distribution will bear the brunt of the economic slowdown, resulting in fewer employment opportunities, lower wages, lost consumption, and lower savings. Congress needs to understand that it will raise additional revenues on the backs of those citizens it often works to help through income redistribution programs. [____] Tax increase will result in lower economic output William W. Beach, Director of the Center for Data Analysis at The Heritage Foundation, 2010 (September 20, “Obama Tax Hikes: The Economic and Fiscal Effects,” http://www.heritage.org/research/reports/2010/09/obama-tax-hikes-the-economic-and-fiscal-effects) Lower Economic Output. GDP will be, on average, $111 billion lower over the 2011 to 2020 forecast horizon. The projected slowdown in the U.S. economy will result largely from significantly reduced incentives to save and invest in productive capital and technology through higher capital gains and dividend taxes. The productive capacity of the economy is also lowered by the disincentive for high-income individuals to supply their labor due to the higher marginal tax rates on income. 9|Page Taxes Bad DA BDL Tax Increases Hurt the Economy [____] [____] Taxing capital causes stagnation William W. Beach, Director of the Center for Data Analysis at The Heritage Foundation, 2010 (September 20, “Obama Tax Hikes: The Economic and Fiscal Effects,” http://www.heritage.org/research/reports/2010/09/obama-tax-hikes-the-economic-and-fiscal-effects) Arguably, many high-income individuals earn their income from capital income rather than labor income. However, at the macro (aggregate) level, the marginal effects of tax rates also affect individuals on the cusp of moving into the high-income brackets. Therefore, it is not only current high-income individuals who are discouraged from supplying their labor, but also those who, through a little more labor supply, woul...
View Full Document

Ask a homework question - tutors are online