How the taxation of capital affects growth and employment
Kevin A. Hassett | Testimony before the Joint Economic Committee
April 17, 2012

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Chairman Casey, Vice Chairman Brady, and Members of the Committee, thank you for inviting me to appear today to discuss how the taxation of capital affects the economy.

This nation employs several methods for taxing capital income, both at the individual and the corporate level.  There is a massive economic literature that documents strong theoretical and empirical support for the United States to reduce its capital taxes. The consensus amongst economists on these issues has had a hit-and- miss record driving political consensus. There has been a strong bipartisan consensus regarding capital gains taxes, which were cut dramatically by Jimmy Carter in 1978, and again by Bill Clinton in 1997. Dividend taxes are also currently low, having been extended on a bipartisan basis in 2010. There has been less of a political consensus regarding the corporate tax, and the U.S.'s currents status as the highest tax country in the developed world is likely the most pressing tax policy issue of the day.

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About the Author

 

Kevin A.
Hassett
  • Before joining AEI, Mr. Hassett was a senior economist at the Board of Governors of the Federal Reserve System and an associate professor of economics and finance at the Graduate School of Business of Columbia University, as well as a policy consultant to the Treasury Department during the George H. W. Bush and Clinton administrations. He served as an economic adviser to the George W. Bush 2004 presidential campaign, chief economic adviser to Senator John McCain during the 2000 presidential primaries, senior economic adviser to the McCain 2008 presidential campaign, and economic adviser to the Mitt Romney 2012 presidential campaign.   Mr. Hassett is a columnist for National Review.

  • Phone: 202-862-7157
    Email: khassett@aei.org

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    Name: Emma Bennett
    Phone: 202-862-5862
    Email: emma.bennett@aei.org
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