She would also raise the top marginal rate to 39.6 percent, its level for much of her husband’s administration. Increasing high-end tax rates would bring in $52 billion a year, her campaign says, and help pay for some of her other proposals.
A few observations from the Good Professor Greg Mankiw:
1. The $52 billion estimate seems high to me. The CBO reports that each percentage-point increase in the top two income tax rates–singles making over about $150K, married taxpayers over about $180K–increases tax revenue by only $6.5 billion in 2009. Multiply that by 4.6 (the proposed rate increase), and you get $29 billion, not $52 billion. And even that $6.5 billion is an overestimate, because it includes the top two rates, not just the top rate. I would guess that the Clinton campaign included other tax increases in the $52 billion figure, such as increases in the tax rates for dividends and capital gains.
2. Even taking the $52 billion estimate at face value, it shows how little revenue would come from increasing taxes on the rich. This is only about 1/3 of one percent of GDP.
My Take: To get from $29 billion to $52 billion, you have three options.
1) Define rich down to something considerably lower than $150K. OR
2) Add a lot more taxes of other types. OR
3) Both 1 and 2.
Remember the Hillary Christmas Tree Ad, with all the presents underneath? Somebody has to pay for it.
There is another recurring theme in Hillary’s interviews on business and the economy. One of increased government oversight.
“If you go back and look at our history, we were most successful when we had that balance between an effective, vigorous government and a dynamic, appropriately regulated market,” Mrs. Clinton said. “And we have systematically diminished the role and the responsibility of our government, and we have watched our market become imbalanced.”
Although the two Clintons share similar views on a wide range of economic issues, she has long been more skeptical about the benefits of freer trade and other aspects of a free-market economy. While he peppered his 1992 campaign speeches with both populism and calls for personal responsibility, including welfare reform, she talks less about irresponsibility among individuals and more about irresponsibility in corporate America and the government.
In a Hillary presidency we can look forward to more government regulation. More rules and regulations that stifle new business formation, new job creation and ever increasing taxes.
Still, if Mrs. Clinton is elected, she might bring the toughest regulatory scrutiny of any president in a generation.
