Is There a "Bad" Tax Cut?
By Ryan Ellis • Thursday, April 16, 2009 9:00 am
Executive Director Ryan Ellis today was a featured panelist in Washington, DC hosted by America's Future Foundation. The panel, entitled "Is There Such a Thing As A Bad Tax Cut?" was held at the Fund for American Studies near Dupont Circle.
The video feed should be up soon, but in the meantime, here's what I went over:
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To answer the question, "no," there is no such thing as a bad tax cut. All tax cuts deprive the government of revenue, which is a good thing. Some tax cuts (e.g. cutting the capital gains tax rate) are better than others (e.g. the ethanol tax credit). But no tax cuts are "bad"
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Some tax cuts are actually not tax cuts at all--they are spending. One-third of income tax filers don't have an income tax liability. 15 percent of filers have neither an income tax nor a payroll tax liability. It's arithmetically-impossible to cut taxes for these people. Instead, they receive a welfare benefit called a "refundable credit" which even the government scorekeepers admit is spending
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The most effective tax cut right now would be to cut the top corporate income tax rate, which is tied for highest in the world with Japan
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The best thing that could be done for investors right now is to provide some certainty that the capital gains and dividends tax rate of 15 percent will be there permanently
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