February 19, 2009
Harvard Economics Professor Calls Stimulus “Terrible Piece of Legislation”
In Tax Foundation Podcast, Robert Barro, PhD, Finds Temporary Economic Action "Unattractive," Calls for Permanent Changes to Tax Structure to Spur Economic Growth
Washington, DC, February 19, 2009 - 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.
In a discussion with Tax Foundation Vice President for Economic Policy Robert Carroll in this week's edition of the Tax Policy Podcast, Barro strongly disapproves of both the expenditure and tax provisions within the stimulus legislation.
"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 points to the 2003 tax cut legislation as being very positive for economic growth, and chides the current administration for blaming those policies for the current economic downturn.
"The economy did very well for the next several years after the tax cuts of 2003. And it's very unfair that Obama has blamed that program for part of the current financial collapse," Barro argues. "There's really no linkage between the tax rate cutting program of 2003 and the financial and housing collapse we've seen in recent months."
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."
This Tax Policy Podcast can be found at http://www.taxfoundation.org/podcast/show/24350.html.
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
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To schedule an interview, please contact Matt Moon, the Tax Foundation's Manager of Media Relations, at (202) 464-5102.
