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Letter


More than 300 Economists Say to Congress: Support Extension of Lower Tax Rates!

September 22, 2010

Dear Member of Congress:

     We, the undersigned economists*, write in support of extending current tax rates on income and investments in order to prevent a devastating blow to America’s fragile economic recovery. Robust economic growth is best served by a tax code that levies low and predictable rates.  The promise of a tax increase in January 2011 would create significant economic distortions as individuals and businesses conserve capital or stave off hiring.

     Failing to extend the reduced tax rates implemented in 2001 and 2003 would constitute a profound and damaging “anti-stimulus” that would harm our prospects for expansion in the near future.  The 10 percent bracket would disappear, and the three middle tax brackets would rise by three percentage points, heaping heavier burdens on the working class and wealthy alike. The top marginal income tax rate would rise from 35 percent to 39.6 percent, leading to higher tax bills not just for wealthy individuals but for many small businesses that file their taxes through the individual income tax system. Capital gains and dividend taxes would rise from top rates of 15 percent each to 20 percent and 39.6 percent, respectively, penalizing entrepreneurship and potentially leading to a harmful sell-off of assets in December of this year. Americans would also see the return of the now-defunct estate tax at a top rate of 55 percent, jeopardizing the ability of family businesses to remain intact as they pass to the next generation.

     In addition, allowing these tax provisions to expire threatens to increase the already staggering complexity of the code. According to a National Taxpayers Union study, individual taxpayers alone will spend 2.43 billion hours complying with income tax laws this year. This loss of time and associated costs (estimated at more than $100 billion) would only be made worse if policies such as the estate tax, “Pease limits” on itemized deductions, and the Personal Exemption Phaseout were permitted to return.

     Even confining tax hikes to wealthier individuals will have deleterious effects, as households earning more than $210,000 account for one of every three dollars in consumer outlays. Furthermore, businesses directly impacted by upper-bracket tax increases would slow their activities, thereby diminishing economic opportunities for their subcontractors in lower brackets. Finally, a growing economy and prudent spending restraint – not punitive taxes – comprise the best route to reducing long-term federal budget deficits.

     Congress should prevent these new burdens from hitting all American families and businesses, as they threaten to undermine an economy still suffering from 9.6 percent unemployment and anemic growth. If Congress allows heavier taxes on work and investment, we will undoubtedly see less of both at a time when they are needed most.

Sincerely,

The Undersigned*

Manuel A. Abdala
LECG, LLC

Burton A. Abrams
University of Delaware

Douglas K. Adie
Ohio University

William P. Albrecht
University of Iowa

Donald L. Alexander
Western Michigan University

Ryan C. Amacher
University of Texas at Arlington

Wayne Angell
Angell Economics

George R. Averitt
Purdue University North Central

Charles W. Baird
California State University, East Bay

William Barnett, II
Loyola University New Orleans

Tim Bastian
Creighton University

Chip Baumgardner
Pennsylvania College of Technology

Pedro Belli
Independent Consultant, Virginia

Bruce Bender
University of Wisconsin - Milwaukee

James T. Bennett
George Mason University

M. Douglas Berg
Sam Houston State University

Elizabeth C. Bogan
Princeton University

Donald R. Booth
Chapman University

G. Geoffrey Booth
Michigan State University

Michael D. Bordo
Rutgers University

Samuel Bostaph
University of Dallas

Scott Bradford
Brigham Young University

Charles H. Breeden
Marquette University

Ivan Brick
Rutgers University

Phillip J. Bryson
Brigham Young University

Richard V. Burkhauser
Cornell University

Robert Burrus
University of North Carolina Wilmington

Edwin T. Burton
University of Virginia

James L. Butkiewicz
University of Delaware

William N. Butos
Trinity College

Joseph Calhoun
Florida State University

Charles Calomiris
Columbia University

Victor A. Canto
La Jolla Economics

Don M. Chance
Louisiana State University

Gregory Chow
Princeton University

Lawrence R. Cima
John Carroll University

Douglas Coate
Rutgers University

Warren Coats
Retired, International Monetary Fund

John P. Cochran
Metropolitan State College of Denver

Lloyd Cohen
George Mason University

Michael Connolly
University of Miami

Michelle Connolly
Duke University

Lee A. Coppock
University of Virginia

Mike Cosgrove
Econoclast

Jim F. Couch
University of North Alabama

Eleanor D. Craig
University of Delaware

Nicole Crain
Lafayette College

Mario J. Crucini
Vanderbilt University

Kirby R. Cundiff
Northeastern State University

Robert M. Dammon
Carnegie Mellon University

Coldwell Daniel, III
University of Memphis

Antony Davies
Duquesne University

A. Edward Day
Retired, University of Central Florida

Greg Delemeester
Marietta College

Stephen J. Dempsey
University of Vermont

Joseph S. DeSalvo
University of South Florida - Tampa

William G. Dewald
Ohio State University

Isaac DiIanni
Northeastern State University

Jeffrey H. Dorfman
University of Georgia

Floyd H. Duncan
Virginia Military Institute

James R. Edwards
Montana State University - Northern

John B. Egger
Towson University

J. Elterich
University of Delaware

Bert Ely
Ely & Company, Inc.

Kenneth G. Elzinga
University of Virginia

Stephen J. Entin
Institute for Research on the Economics of Taxation

Richard E. Ericson
East Carolina University

Dorla A. Evans
University of Alabama in Huntsville

Paul Evans
Ohio State University

Frank Falero
California State University, Bakersfield

Eugene F. Fama
University of Chicago

Allen M. Featherstone
Kansas State University

Susan Feigenbaum
University of Missouri - St. Louis

John A. Flanders
Central Methodist University

Arthur A. Fleisher, III
Metropolitan State College of Denver

Harold Flint
Montclair State University

Fred Foldvary
Santa Clara University

Richard H. Fosberg
William Paterson University

Michelle Michot Foss
University of Texas at Austin

Micah Frankel
California State University, East Bay

Michele Fratianni
Indiana University

D.C. Frechtling
George Washington University

B. Delworth Gardner
Brigham Young University

Gabriel Gasave
The Independent Institute

James F. Gatti
University of Vermont

David E.R. Gay
University of Arkansas

Charles Geiss
University of Missouri - Columbia

Robert Genetski
ClassicalPrinciples.com

Joseph A. Giacalone
St. John’s University

Michael Gibbs
University of Chicago

Adam Gifford
California State University, Northridge

Micha Gisser
University of New Mexico

Stephan F. Gohmann
University of Louisville

Rodolfo A. Gonzalez
San Jose State University

Richard L. Gordon
Pennsylvania State University

Ernie Goss
Creighton University

Wendy L. Gramm
Former Chairman, U.S. Commodity Futures Trading Commission

Richard J. Grant
Lipscomb University

Kenneth V. Greene
Binghamton University

John G. Greenhut
Texas A&M University - Commerce

Paul Gregory
University of Houston

John D. Grether
Northwood University

Earl L. Grinols
Baylor University

Daniel M. Gropper
Auburn University

Darrin V. Gulla
University of Kentucky

Gerald Gunderson
Trinity College

James Gwartney
Florida State University

Colleen E. Haight
San Jose State University

Dennis Halcoussis
California State University, Northridge

David Hammes
University of Hawaii at Hilo

Gary D. Hansen
University of California, Los Angeles

Stephen Happel
Arizona State University

Rich Hart
Miami University

James E. Hartley
Mount Holyoke College

Thomas Hazlett
George Mason University

Frank Hefner
College of Charleston

Robert H. Heidt
Indiana University

Scott E. Hein
Texas Tech University

Ronald A. Heiner
George Mason University

Robert B. Helms
American Enterprise Institute

David R. Henderson
Stanford University

Bradley K. Hobbs
Florida Gulf Coast University

Charles L. Hooper
Hoover Institution

C. Thomas Howard
University of Denver

Ronald A. Howard
Stanford University

Andrei Illarionov
Cato Institute

Christopher R. Inama
Golden Gate University

Thomas R. Ireland
University of Missouri - St. Louis

F. Owen Irvine
Michigan State University

Alexei Izyumov
University of Louisville

Brian Jacobsen
Wisconsin Lutheran College

Austin J. Jaffe
Pennsylvania State University

Clark Johnson
U.S. Department of Defense

James L. Johnston
Heartland Institute

Jason Scott Johnston
University of Virginia

Clifton T. Jones
Stephen F. Austin State University

Richard E. Just
University of Maryland

Adrienne Kearney
University of Maine

Barry Keating
University of Notre Dame

Raymond J. Keating
Small Business & Entrepreneurship Council

Carrie B. Kerekes
Florida Gulf Coast University

Peter M. Kerr
Southeast Missouri State University

E. Han Kim
University of Michigan

Chris Kirby
Clemson University

Paul R. Koch
Olivet Nazarene University

Robert Krol
California State University, Northridge

Cory Krupp
Duke University

Kishore G. Kulkarni
Metropolitan State College of Denver

Michael M. Kurth
McNeese State University

Richard E. La Near
Missouri Southern State University

David N. Laband
Auburn University

William W. Laird
Florida State University

Daniel Landau
University of Connecticut

Richard N. Langlois
University of Connecticut

John S. Lapp
North Carolina State University

Nicholas A. Lash
Loyola University Chicago

Don R. Leet
California State University, Fresno

Tom Lehman
Indiana Wesleyan University

Haizheng Li
Georgia Institute of Technology

Tony Lima
California State University, East Bay

Jody Lipford
Presbyterian College

Hong Liu
Washington University in St. Louis

Edward J. Lopez
San Jose State University

James R. Lothian
Fordham University

Lawrence W. Lovik
Alabama Policy Institute

Robert E. Lucas
University of Chicago

Donald L. Luskin
Trend Macrolytics, LLC

R. Ashley Lyman
University of Idaho

Glenn MacDonald
Washington University in St. Louis

Lynn MacDonald
St. Cloud State University

Keith D. Malone
University of North Alabama

Yuri N. Maltsev
Carthage College

Henry G. Manne
George Mason University

Richard D. Marcus
University of Wisconsin - Milwaukee

Michael L. Marlow
California Polytechnic State University

Deryl W. Martin
Tennessee Technological University

Timothy Mathews
Kennesaw State University

John Matsusaka
University of Southern California

Thomas H. Mayor
Retired, University of Houston

John McArthur
Wofford College

W. Douglas McMillin
Louisiana State University

Lawrence J. McQuillan
Pacific Research Institute

Tom Means
San Jose State University

Roger Meiners
University of Texas at Arlington

Allan Meltzer
Carnegie Mellon University

Stephen T. Mennemeyer
University of Alabama at Birmingham

John Merrifield
University of Texas at San Antonio

Paul G. Merski
Independent Community Bankers of America

Dan Messerschmidt
Lynchburg College

James C. Miller, III
Budget Director, President Ronald Reagan, 1985-1988

Roy Miller
Advocates for Liberty

Tracy Miller
Grove City College

Mario J. Miranda
Ohio State University

Jeffrey Miron
Harvard University

David M. Mitchell
Missouri State University

Thomas Moeller
Texas Christian University

James Moncur
University of Hawaii at Manoa

Carlisle E. Moody
College of William & Mary

Adrian Moore
Reason Foundation

Robert L. Moore
Occidental College

John C. Moorhouse
Wake Forest University

Barry Morris
University of North Alabama

Michael A. Morrisey
University of Alabama at Birmingham

Frank W. Musgrave
Ithaca College

Richard F. Muth
Emory University

Steven C. Myers
University of Akron

Ronald M. Nate
Brigham Young University - Idaho

Anthony Negbenebor
Gardner-Webb University

James F. Nieberding
Cleveland State University, and LECG, LLC

Michael P. Niemira
International Council of Shopping Centers, Inc.

Lee Ohanian
University of California, Los Angeles

Lydia Ortega
San Jose State University

Randall Parker
East Carolina University

E.C. Pasour, Jr.
North Carolina State University

Judd W. Patton
Bellevue University

William Peirce
Case Western Reserve University

Penn R. Pfiffner
Independence Institute

Christopher C. Pflaum
Spectrum Economics, Inc.

Gordon M. Phillips
University of Maryland

G. Michael Phillips
California State University, Northridge

Youyu Phillips
Keystone College

Charles R. Plott
California Institute of Technology

Alex J. Pollock
American Enterprise Institute

Joseph Pomykala
Towson University

Jeffrey Pontiff
Boston College

Barry W. Poulson
University of Colorado

Ronald L. Promboin
University of Maryland University College

Richard W. Rahn
Institute for Global Economic Growth

Reza Ramazani
Saint Michael’s College

Taghi Ramin
William Paterson University

James B. Ramsey
New York University

R. David Ranson
H.C. Wainwright & Co. Economics, Inc.

Ralph R. Reiland
Robert Morris University

Robert Reinke
University of South Dakota

Christine P. Ries
Georgia Institute of Technology

Mario J. Rizzo
New York University

Nancy H. Roberts
Arizona State University

Richard Roll
University of California, Los Angeles

Tim Roth
University of Texas at El Paso

Charles K. Rowley
George Mason University

Paul H. Rubin
Emory University

Juan Rubio-Ramirez
Duke University

John Ruggiero
University of Dayton

Mark Rush
University of Florida

John Rutledge
Claremont Graduate University

Atulya Sarin
Santa Clara University

Raymond Sauer
Clemson University

Thomas R. Saving
Texas A&M University - College Station

David Schmidtz
University of Arizona

Loren C. Scott
Louisiana State University

Robert Haney Scott
California State University, Chico

John Seater
North Carolina State University

Roger A. Sedjo 

Richard T. Selden
Retired, University of Virginia

Barry J. Seldon
University of Texas at Dallas

John Semmens
Laissez Faire Institute

Alan C. Shapiro
University of Southern California

Stephen Shmanske
California State University, East Bay

Mark Showalter
Brigham Young University

William Shughart, II
University of Mississippi

Vlad Signorelli
Bretton Woods Research, LLC

Chuck Skipton
University of Tampa

James F. Smith
Econforecaster, LLC

Vernon L. Smith
Chapman University

Russell Sobel
West Virginia University

Lawrence Southwick
University at Buffalo

Dean Stansel
Florida Gulf Coast University

Craig Stephenson
Babson College

Frank Stephenson
Berry College

Derek Stimel
Menlo College

Houston H. Stokes
University of Illinois at Chicago

Courtenay C. Stone
Ball State University

Brian Strow
Western Kentucky University

Avanidhar Subrahmanyam
University of California, Los Angeles

Scott Sumner
Bentley College

Daniel A. Talley
Dakota State University

Robert Tamura
Clemson University

Cliff Tan
Societe Generale

John A. Tatom
Indiana State University

Jason E. Taylor
Central Michigan University

Larry Taylor
Lehigh University

Rebecca A. Thacker
Ohio University

Teresa Tharp
Valencia Community College

David J. Theroux
The Independent Institute

Wade L. Thomas
State University of New York at Oneonta

Alex Tokarev
King’s College

Aaron Tornell
University of California, Los Angeles

George H. Troughton
Private Investor

William N. Trumbull
West Virginia University

David G. Tuerck
Suffolk University

Kamal P. Upadhyaya
University of New Haven

T. Norman Van Cott
Ball State University

Richard Vedder
Ohio University

George J. Viksnins
Georgetown University

Doug Walker
College of Charleston

William Walstad
University of Nebraska - Lincoln

Alan Rufus Waters
California State University, Fresno

Bruce Webb
Gordon College

John Wicks
University of Montana, Missoula

Michael E. Williams
University of Denver

Douglas Wills
University of Washington Tacoma

Michael Wohlgenant
North Carolina State University

Gary Wolfram
Hillsdale College

Jack Worrall
Rutgers University

Tom Wyrick
Missouri State University

Bruce Yandle
Clemson University

Bill Yang
Georgia Southern University

DeVon L. Yoho
Ball State University

John Zdanowicz
Florida International University

Richard Zecher
P/E Investments, and Investor Analytics

Jerold L. Zimmerman
University of Rochester

Joseph Zoric
Franciscan University of Steubenville

Benjamin Zycher
Pacific Research Institute

* Affiliations listed for identification purposes only