New language, same findings: Tax hikes on the rich won’t cripple the economy

December 13, 2012

Under pressure from Senate Republicans, the Congressional Research Service withdrew a September report that concluded that there was no correlation between top individual tax rates and economic growth. Republicans claimed that the report was biased in tone and faulted its methodology, and convinced the agency to remove the report from circulation.


(J. Scott Applewhite/Associated Press)

The CRS has now released a revised edition of the report that changes some of the language that Republicans had found most objectionable, bolsters the arguments cited in favor of tax cuts and clarifies its methodology. But its underlying conclusion about the Bush tax cuts remains the same. 

The nonpartisan office, which is part of the Library of Congress, denies that it was simply acting at the whim of Republicans. "CRS decided to report on its own," said spokesperson Janine D'Addario, stressing the office's commitment to objectivity. "To my knowledge, we have never withdrawn a report based solely on comments from Congress." 

But many of the changes reflect the GOP's criticism of the original report. Republicans were incensed that the original report referred to "tax rates on the rich," which the CRS has revised to "high-income taxpayers." The new version of the CRS report is also padded with new citations to research in support of Republicans' view that tax cuts view economic growth.

In the original report, for instance, the report says that "some have argued that raising tax rates, especially on higher-income taxpayers, to increase tax revenues is part of the solution for long-term debt reduction." The new report pairs this statement ("On the one hand ...) with the contrary view ("On the other hand, others argue that maintaining low tax rates is necessary to foster economic growth"), citing a House bill for extending the Bush tax cuts that had originally just been a footnote.

The revised report also includes a new section called "methods" that details how the researcher, Thomas Hungerford, went about examining the correlation between tax rates and economic growth. 

Both sides are claiming some kind of vindication. The Republicans who blasted the original report say they're pleased it got another look. "While we don’t necessarily agree with its conclusions, hats off to CRS for hearing out our concerns and agreeing that the report needed to be modified to reach their standards," says Antonia Ferrier, a spokesperson for the Senate GOP Finance Committee.

But House Democrats stress the fact that the bottom line of the report remains exactly the same: "The results of the analysis suggest that changes over the past 65 years in the top margin rate and the top capital gains tax rate do not appear correlated with economic growth."

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Brad Plumer | December 13, 2012