Eliot Spitzer - Looking at the Data

If last week was all about politics - and thankfully things turned out pretty well - maybe thisweek we can put ideology and partisanship aside for a moment and apply a more objective,scientific approach to some of the tough issues we face. What do historical records and datasuggest might be the better course for our nation to follow? Specifically, what is the impact ofincreasing the top marginal tax rate on the rate of investment and job creation? If numbers could persuade me that raising that rate injured job creation, I would reconsider mybelief that the wealthy should pay more - because job creation is issue one. On the otherhand, if the record established that raising the top marginal rate did not in any way injureinvestment and job creation, then those who have been unalterably opposed should be forcedto reconsider their views as well. Analysis trumping ideology. And we now have the analysis -- a fascinating report just issued by the CongressionalResearch Service. The CRS is a non-partisan entity that produces academic quality researchto answer tough policy questions; its reports are put through a process of rigorous analysisbefore they are released. The bottom line conclusion of the CRS report is this: 

"The reduction in the top tax rates appears to be uncorrelated with saving, investment, andproductivity growth. The top tax rates appear to have little or no relation to the size of theeconomic pie. However, the top tax rate reductions appear to be associated with theincreasing concentration of income at the top of the income distribution."

The report presents the sort of analysis many of us have been discussing for years, thoughdone much more rigorously: tax rates were at the highest when growth was at its peak, andthe reduction in rates has not had any discernible impact on the types of investment that leadto growth. You can read the full report linked at our website. Rather than acknowledge the findings, however, the Republican efforts have been directed athaving the report withdrawn. It is a fascinating story in its own right - reminiscent of a differentera , when news the government didn't like was simply suppressed. But leave that for anotherday. The important point here is the scientific conclusion reached by the study: raising the top taxrate to 39.6% will not have any of the damaging consequences that the Grover Norquists ofthe word suggest. A week after the political and ideological battle to support slightly highertaxes on the wealthy was won, we now also have a numbers-based analysis supporting thesame course. Facts matter. And in this case, fairness wins. That's My View.