Dr. Christina Romer, a professor at Cal Berkley and former Chair of President Obama’s Council of Economic Advisors researched and published a study showing that the income tax “hump” is 28%. What that means is that increasing the income tax rate up to 28% yields more revenues to the Treasury, but raising the rate above 28% causes high-end earners to invest in non-taxable assets, so reduces Treasury revenues. So why in order to reduce the deficit would the President insist on raising the rate on the top 2% of earners fro 35% to 39.6%, and claim that doing so will raise an additional $600 billion? Ignorance or lying?
In April 2008 then-candidate Obama was asked by a pesky reporter whether he knew that raising the capital gains tax from 15% to 40% would, indeed, result in less money to the Treasury. The now-President relied, “Yes, but this is about fairness.” So, again I ask, “Ignorance or lying?”