A Q&A With McCain Adviser Douglas Holtz-Eakin

Taxes and growth

"The economists who have actually studied this have come to ...."

a very different conclusion from the one Steve Roth prefers:

http://gregmankiw.blogspot.com/2006/05/must-read.html

For example, let's let Barro speak for himself on tax rates:

http://www.businessweek.com/magazine/content/04_09/b3872039_mz007.htm

DL Smith of CA @ Apr 25, 2008 12:09:11 PM

Taxes, GDP Growth, and National Prosperity

>there is no way you can tax enough to meet those pressures—and

>if you tried, you would do such harm to the economy that it would ultimately fail

This is a faith-based belief, not grounded in facts.

The economists who have actually studied this have come to very clear conclusions: in developed countries with tax burdens ranging (hugely) from 25-49% of GDP, there is *no correlation* between tax burden and long-term prosperity.

See in particular Barro 1996, and Nijkamp and Poot's 2003 meta-analysis, both discussed and linked here:

http://trueconservative.typepad.com/trueconservative/2008/02/small-governmen.html

It's not clear which is the better metaphor for Grover Norquist's potion—Ken Kesey's Kool-Aid or Jim Jones's. But Holtz-Eakin seems to have been drinking it.

Steve Roth of WA @ Apr 23, 2008 14:35:31 PM

Cap and Trade vs. Carbon Tax

The opposition to the carbon tax does not come from the environmental community but rather from business. Businesses assigned the quotas from the cap and trade approach will make out like bandits at the expense of consumers.

For more on the carbon tax see --

http://www.carbontax.org/

Richard A. of CA @ Apr 23, 2008 11:58:27 AM