EconoMeter: Will Obama's new tax plan help economy?
Would the economy benefit from raising capital gains rate?
Roger Showley, SAN DIEGO UNION-TRIBUNE
Friday, February 17, 2012
Kelly Cunningham, National University System
In three years since taking office, President Obama signed into law 21 new or higher taxes. In the meantime the economy continued to flounder. The latest budget proposal would further raise net taxes over the next decade by $1.56 trillion. As a percentage of the economy, tax revenues would rise to 20.1 percent of GDP, far higher than historical averages of 18.3 percent. Many economic studies find increased government spending significantly lowers private spending. For each additional dollar of federal debt, far less than a dollar is added to GDP, especially as consumer and investor confidence diminishes over fiscal sustainability concerns.