Re: A Question for the Economists

1

Bruce Bartlett is a former deputy assistant Treasury secretary for economic policy (during Bush I). He defended the Bush tax cuts on NPR's Fresh Air on Feb 25th. Receiving a far less hostile reception from Terry Gross was the show's other guest, Paul "Bush is a Liar" Krugman. Click here for the NPR page with links to the archive program.

-Magik


Posted by: Magik Johnson | Link to this comment | 03- 5-03 5:24 PM
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2

In defense of the tax cut, sort of:

Eliminating the different tax rates on capital gains and dividends would encourage companies to pass unneeded cash to investors. This is a positive economic effect because investors will then employ that cash in the most productive parts of the economy, whereas a company will not (since it is not primarily an investment manager). There are other reasons why companies are reluctant to dividend back their excess cash, but this is an important one.

It is interesting that Stiglitz doesn't address this question. Some commentators have questioned whether the Bush proposal would really meet this goal. But it's a complicated issue having to do with the nuts and bolts of implementation. So we really need to find an expert voice to address this point.



Posted by: Magik Johnson | Link to this comment | 03- 5-03 10:47 PM
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