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