IPI Publication Press Release
IPI Issue Brief
Related Publication Title:
What’s the Most Potent Way to Stimulate the Economy?
Released by Gary Robbins, Aldona Robbins on 11/20/2002
IPI Issue Brief
Related Publication Title:
What’s the Most Potent Way to Stimulate the Economy?
Released by Gary Robbins, Aldona Robbins on 11/20/2002
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Press Release (10/10/2001)
Press Release (11/20/2002)
Media Advisory (12/01/2001)
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The Top Six Ways to Get the Economy Going Again
And Get the Best Bang For the Buck
Contact: Misty Woodruff
888-557-4474 or misty@ipi.orgDallas, TX: The Bush administration and newly elected members of Congress are promising a tax cut package that will spur the economy. But what kind of tax cuts?
According to the Institute for Policy Innovation (IPI), legislators ought to consider tax cuts that would encourage economic growth and investment.
"Using tax cuts to give a needed boost to the economy is a good idea; the trick is implementing policies that will deliver the biggest payoff at the lowest cost," say Aldona and Gary Robbins, co-authors the Institute for Policy Innovation study, "What's the Most Potent Way to Stimulate the Economy?".
According to the Robbins, an economic stimulus package should:
#1. Cut capital gains taxes. Capital gains deductions would add $10.61
to Gross Domestic Product (GDP) per dollar of revenue cost.
#2. Accelerate depreciation. Depreciation reform would add $9.00 to GDP per
dollar of taxes cut.
#3. Expand IRA. IRA expansion would add $6.97 to GDP per dollar of
revenue cost.
#4. Repeal the AMT. Repeal of the Alternative Minimum Tax would add $5.61 to
GDP per dollar of revenue cost.
#5. Accelerate 2001 Tax Cuts. Faster reduction for personal rates would
add $2.10 to GDP for every dollar of revenue cost.
#6. Cut Payroll Taxes. Without a cap, cutting the payroll tax would add only $.70
to GDP per dollar of revenue cost. Limited cuts would add $.23 to GDP.
Prioritizing the tax cuts is important, since not all tax cuts are created equal. The Robbins' findings suggest that reducing rates on capital — capital gains and accelerated depreciation—would have the biggest economic payoff. By contrast, "The payroll tax cut and a personal rate cut don't offer nearly as much bang for the buck," asserted authors Aldona and Gary Robbins.
IPI President Tom Giovanetti asserted, "Instead of short-term fixes, the problems demand and deserve lasting, long-term solutions."
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For copies of this IPI report or for further information, please visit www.ipi.org or contact Misty Woodruff at (972) 874-5139 or at misty@ipi.org.
Interviews may be arranged.
For copies of this IPI report or for further information, please visit www.ipi.org or contact Misty Woodruff at (972) 874-5139 or at misty@ipi.org.
Interviews may be arranged.
