According to a recent White House video explaining the administration’s opposition to extending the 2001 and 2003 tax cuts, Council of Economic Advisers Chairman Austan Goolsbee claims:
“If you ask objective economists and analysts around the country about what is effective you will find that everyone agrees that these giant tax cuts for very high income people are the least effective thing that we can do to get the economy growing.”
If your definition of objective economists is limited to the White House’s economic team, then perhaps this statement could be true. Unless you also count Obama’s former Office of Management and Budget Director Peter Orszag, who suggested extending what many refer to as the Bush tax cuts for the next two years.
Then there is the 362,000-member National Taxpayers Union, which sent a letter to Congress on last month signed by 313 economists, including a Nobel laureate, in support of extending all of the 2001 and 2003 the tax cuts. As Pete Sepp, NTU’s executive vice president, explained at The Bloggers Briefing:
“The issue of extending taxpayer relief laws is not a fringe issue. … There is a large body of the economic community saying this is your only option right now. This is by far your best option. Not doing it, even for some individuals, is what these economists would call an anti-stimulus.”
Economists at The Heritage Foundation’s Center for Data Analysis estimated the effects of the Obama tax hikes and reached a similar conclusion that employment and growth of the economy cannot be made through higher taxes.
The reality for Goolsbee is that seldom, if ever, does everyone agree about anything, especially when it comes to governing. There isn’t unanimous agreement on the Bush tax cuts among economists, nor is there likely to be.
Before members of Congress returned to their districts to campaign for re-election, there was enough support from objective economists and analysts to convince a number of Democrats to break ranks with the White House and come out in support of extending all the Bush tax cuts. For all his discussion about widespread agreement, that’s a point Goolsbee failed to appreciate: The only bipartisan agreement that does exist is actually in disagreement with him.