Friday, February 20, 2009

Barro: Stimulus Is A "Terrible Piece of Legislation"

Washington, DC-- Robert Barro, Professor of Economics at Harvard University, criticizes the recently passed federal stimulus package as a "terrible piece of legislation," and calls for permanent changes to the tax structure to spur economic growth.

"What they call tax reductions in this bill are really transfer payments, particularly redistribution of income from the rich to the poor," says Barro. "I don't think it's really attractive to do something in a temporary fashion. You want to have a more stable tax structure."

Barro also makes recommendations to lawmakers regarding long-term economic incentives to drive economic expansion.

"Abolishing the corporate income tax at the federal level I think would be very positive. It's a very poor form of taxation," says Barro. "I would make permanent the kinds of changes that were in the 2003 tax reform, including the marginal tax rate structure."


14 Comments:

At 2/20/2009 11:45 AM, Anonymous Anonymous said...

I agree with the corporate tax sentiment. If we had dropped corporate taxes it would have been more successful at stimulating the economy than either stimulus package at a cost of only $300 billion per year instead of about $2,000 billion for 2008 and 2009. Six years of 0% corporate taxes would have cost less.

Corporate taxes don't tax corporations. Households own the factors of production so corporate taxes fall about evenly on:

* Employees in lower wages
* Consumers in higher prices
* Shareholders in lower profits

 
At 2/20/2009 12:18 PM, Anonymous Anonymous said...

Why, oh, why, oh, why do idiots post about corporate taxes.

Federal tax revenues are screwed when it comes to corporate taxes. Didn't you here about the latest. S&P500 corporations had negative earnings in Q.4.08. You read that right. Negative Earnings.

Do you know that what means? It means that with the latest super-duper look backs, corporations can do carry backs on losses all the way to 2002. Do you further know what that means? Corporate tax revenues will be less than 1999 in nominal revenues to the Treasury.

Stand up, pay some more $$$ to the Treasury, you idiot taxpayer.

 
At 2/20/2009 2:52 PM, Anonymous Anonymous said...

I am the original Anon on this thread. I am not a corporation. Nobody is a corporation. If they did lower corporate taxes to 0, prices would go down, wages would go up and it would give immediate relief to the stock market.

 
At 2/20/2009 3:07 PM, Anonymous Anonymous said...

I am guessing Barro also is anti abortion and really really loves creationism. Is this supposed to be a revelation?

 
At 2/20/2009 5:16 PM, Anonymous Anonymous said...

so corporations have to pay a tribe of accountants to fill out a pile of forms that say the company owes no taxes. that makes a lot of sense.

if you just eliminate the taxes in the first place, companies would save a lot of time and money.

only someone who has never owned and ran a business would suggest paying an accounting department to fill out government forms.

 
At 2/20/2009 5:42 PM, Blogger OA said...

Wait! I thought there was a consensus among economists that the stimulus plan was the right thing. At least that's what I kept hearing from Congressional leaders and the WH.

Does this mean it was all a lie?

 
At 2/20/2009 5:48 PM, Anonymous Anonymous said...

yeah, there's a consensus between the three economists obama talked to.

 
At 2/20/2009 6:18 PM, Anonymous Anonymous said...

Let me see... A. if my taxes go down in a recession (or depression) I am going to go out and hire more people to work for me and expand production... OR... B. I will pocket that money and take care of #1. I wonder which option a small, medium or large business would pick in this economic environment?

Large corporations are going to pay very little if anything anyways seeing as how they are taking losses. But businesses are smart, they will cut cost and layoff people before the impact hits the executives and CEOs. And they will still make sure that they have losses so that they can avoid paying taxes and instead pay themselves via bonuses, perks, ect. After all the shareholders will understand if there are losses... considering the circumstances.

The bottom 90% of people are certainly feeling poorer because they have less money coming in or lost their jobs. But... where is all the wealth that disappeared when the stock market crashed? Did it just disappear into thin air? Or is the wealth still out there under some billionaire's matress waiting for the market to bottom so that they can make more money?

Repubinomics has proved to be a failure... Largest transfer of wealth to the top 1% in all time. Time to wake up.

 
At 2/20/2009 6:30 PM, Blogger Craig said...

"But... where is all the wealth that disappeared when the stock market crashed?"

That statement alone is enough to determine your level of economic knowledge.

 
At 2/21/2009 8:43 AM, Blogger Yorzhik said...

Actually, it would be even better to get rid of the idea of corporations. Businesses should be businesses and people should be people.

 
At 2/22/2009 4:19 AM, Blogger 1 said...

"But... where is all the wealth that disappeared when the stock market crashed? Did it just disappear into thin air?"...


Falling into the black hole of empty socialist promises sucked up by ill informed citizens...

 
At 2/22/2009 1:47 PM, Anonymous Anonymous said...

Why some governors will not take the stimulus money.

 
At 2/22/2009 2:03 PM, Anonymous Anonymous said...

The movement is starting to build!

 
At 2/23/2009 11:03 AM, Blogger 1 said...

Like Haley Barbour, Gov. Bobby Jindal does understand the stimulus bill's problems unlike the Representatives and Senators who don't but continue to lie about it...

 

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