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11:34 AM
Important New Research On a Key Fiscal Cliff Issue
I read two papers over the weekend both of which underscored an important point about an ongoing area of contention around the fiscal cliff: allowing the Bush tax cuts to expire for the top 2% will not have a negative impact on the economy.
The first one is by economist Owen Zidar, a careful econometric study of the impact throughout history of tax changes on jobs and growth. What’s unique and particularly relevant about this study is that it breaks up the tax cuts into the parts that go to the bottom 90% of taxpayers and those that go to the top 10%.
And in numerous different statistical tests and models, Zidar consistently finds no significant impacts of tax cuts to the high income group. As he puts it in the conclusion (my bold):
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