Republicans suppress CRS Report showing tax breaks for the rich don't help economy

Wildlife Actor

From Forbes.com

What do you do when the Congressional Research Service, the completely non-partisan arm of the Library of Congress that has been advising Congress—and only Congress—on matters of policy and law for nearly a century, produces a research study that finds absolutely no correlation between the top tax rates and economic growth, thereby destroying a key tenet of conservative economic theory?

If you are a Republican member of the United States Senate, you do everything in your power to suppress that report—particularly when it comes less than two months before a national election where your candidate is selling this very economic theory as the basis for his candidacy.

Initially released on September 14, 2012, the study—authored by Thomas Hungerford who is a specialist in public finance at the C.R.S.—correlated the historical fluctuations of the highest income tax rates and tax rates on capital gains dating back to World War II with the economic growth (or lack of the same) that followed.

The conclusion?

Lowering the tax rates on the wealthy and top earners in America do not appear to have any impact on the nation’s economic growth.

This paragraph from the report says it all—

“The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.”

These three sentences do nothing less than blow apart the central tenant of modern conservative economic theory, confirming that lowering tax rates on the wealthy does nothing to grow the economy while doing a great deal to concentrate more wealth in the pockets of those at the very top of the income chain.

Not surprisingly, the results of the study caught the attention of a great many conservatives—so much so that, according to a New York Times piece, Republican’s in the United States Senate successfully pressured the Congressional Research Service to withdraw the report shortly after it was released. The withdrawal came over the objection of the CRS economic team and the author of the study.

The Times further reports that, according to Senate Minority Leader Mitch McConnell’s spokesperson, Senator McConnell—along with additional GOP senators— “raised concerns about the methodology and other flaws,” adding that additional people outside of Congress were also criticizing the study.

The nature of these alleged flaws?

That the report included terms such as “the Bush tax cuts” and references to “tax cuts for the rich.”

Added Antonia Ferrier, spokesperson for the Republican members of the Senate Finance Committee, “There were a lot of problems with the report from a real, legitimate economic analysis perspective. We relayed them to C.R.S. It was a good discussion. We have a good, constructive relationship with them. Then it was pulled.”
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For almost 100 years, the Congressional Research Service has worked to assist Congress by providing well-researched and accurate data to be utilized in the creation of important public policy. It has done so when Congress was controlled by Democrats and when Congress has been under the control of Republicans. No matter what party was in charge, the C.R.S. has always endeavored to keep politics out of their work in the effort to provide data that would inform and advance our public policy.

Apparently, solid, well researched data no longer matters—at least not when it comes to the Congressional Republicans.

For those of you who believe that lowered tax rates on the largest earners contribute to an improved economy, I strongly recommend that you read the report. You’ll be able to do so by following this link—

www.dpcc.senate.gov/files/documents/CRSTaxesandtheEconomy%20Top%20Rates.pdf

If, after reading the results of the research, you can identify some error in methodology, then carry on with your assumptions regarding economic theory.

However, if—like me—you can spot no such error in the study, you might consider the importance of forming economic policy based on real data rather than political expediency.
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Huffington Post had this update:

Thomas Hungerford, the CRS researcher who produced the report, told HuffPost that he stands by it. "Basically, the decision to take it down, I think The New York Times article basically got it right, that it was pressure from the Senate minority to take it down," Hungerford said. "CRS reports go through many layers of review before they're issued and as far as the tone and the conclusions go, people who specifically look at the writing and the tone said it was okay. So it's not going to be that and as I can tell you outright, I stand by the report and the analysis in the report."

Hungerford said that he had never experienced suppression like this before, and he pushed back on the GOP argument that he had only looked at the effect of tax cuts in the year immediately following enactment. Regardless, he said, Republicans argue that tax breaks for the rich will bring an immediate benefit to the economy, so their criticism is inconsistent. "I checked out three years and then five years and found that no, it doesn't change the results or the conclusion of my paper. So in a way, I find it interesting that they keep talking about the need to lower the top tax rate in order to stimulate the economy now," he said. 'It sounds like they're being a little inconsistent here."

Despite the pressure, Hungerford said he'll continue doing his job in a nonpartisan way. "I'm not going to change. My job is to do economic analysis on issues that the Congress is comparing and quite frankly, I'm going to continue doing that. That's my job," he said.

The Times reported that Hungerford has given $5,000 this election cycle to Democrats. HuffPost asked if that biased his report in any way. "I leave any political baggage at the door when I walk into my office and pick it up on my way out. I'm there to provide help to members of both parties, which I do," Hungerford said.

Although it’s far from ideal that members of the CRS should be supporters of one party or the other, why isn’t this front and centre in the election debate? It's a new story and although anyone with a brain could work work out the conclusion anyway, when you hear it from an official arm of the nation, it's got to resonate.