The Tax Cliff Is a Growth Killer

Former Ronald Regan aid Art Laffer, was out with a piece in the WSJ discussing the impact of rising taxes as part of the "Fiscal Cliff".  Laffer, has long been a proponent of seeking lower taxes in order to boost or maintain growth.

Weather you blame higher taxes, spending cuts, or Obamacare, we see growth being extremely impacted going forward.  Although the Fed has made it very accommodating to increase spending and thus growth it has not happened.  With the looming "fiscal cliff" this may make growth even harder to come by.

WSJ article here

• The rates on capital income are rising because of the expiration of the Bush tax cuts, and a 3.8% tax on investment income for the highest earners enacted as part of ObamaCare. As happens almost every year, there is a large scheduled expansion of the Alternative Minimum Tax (AMT) to ever-lower levels of income. The highest estate tax rate is scheduled to rise to 55% from 35%, with the lifetime individual exemption dropping to $1 million from $5 million. Meanwhile, tax rates will rise in many states.
• Under the current administration, scheduled tax increases have been delayed, thereby providing people with enormous incentives to accelerate income into 2012 from 2013 and beyond. As a result, growth from 2013 on will be below trend.