Quote:
Originally Posted by belsarius
We "know" that tax increases will create economic drag in the same way we "know" reducing taxes will increase economic activity. That was my point in brining up the tax reduction. What I am disputing is that underlying assumption that it will create drag. Because that assumption is based on the same models that aren't producing the increased activity.
So I will trust an economist like Todd Hirsh to have checked the numbers and determined that any drag would have been minimal. I would expect any drag to be offset by increased demand side drivers because the government was taking that increase in taxes and injecting it back into the economy.
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Respected economist Trevor Tombe was one of the main critics of the tax increase and was vocal about the revenue calculation and impacts proposed by Hirsch. It wasn't all model based and included evidence from previous increases.