WSJ: The Tax Cliff Is a Growth Killer
From Today’s Wall Street Journal:
The United States faces an economic collapse thanks to massive tax increases on Jan. 1, and continued deficit spending for years on end.
In all, federal tax increases total almost $500 billion (over 3% of GDP) per year on a static-revenue basis. And that’s not counting the $1 trillion, 10-year increase in excess spending over tax receipts in the ObamaCare legislation.
Given that many of the new taxes are rate increases at the margin, they will affect incentives to earn additional income. Thus it is a certainty that we face a lower level of output in 2013. The blunt reality is that we cannot have a prosperous economy when government is overspending, raising tax rates, printing too much money, overregulating and restricting the free flow of goods and services across national boundaries.