WASHINGTON Dec 13 Democratic lawmakers on
Thursday lauded an updated congressional report that suggested
there is no conclusive link between higher taxes on the affluent
and economic growth, challenging a key tenet of Republican
ideology amid the fiscal cliff debate.
The nonpartisan Congressional Research Service pulled a
report on the issue from circulation last month, after
Republican lawmakers, including Senate Minority Leader Mitch
McConnell, complained about its methodology and disputed its
The CRS issued a revised report on Wednesday coming to
Its analysis of tax rates and growth over the past 65 years
finds "the reduction in top tax rates has had little association
with saving, investment or productivity growth."
"It is reasonable to assume that a tax rate change limited
to a small group of taxpayers at the top of the income
distribution would have a negligible effect on economic growth,"
the report said.
President Barack Obama and fellow Democrats are locked in a
battle with U.S. House Speaker John Boehner to avert the
so-called fiscal cliff of $600 billion in tax hikes and spending
cuts waiting at year's end.
A key point of dispute is how to treat tax rates on the
wealthiest Americans. Democrats want to extend lower rates for
all individuals except about the top 3 percent of taxpayers.
Republicans want to renew low tax rates on all income
levels, and say raising them will mar economic growth,
particularly for small business.
"This puts a stake in the heart of the Republican argument
that small increases in the marginal tax rates for wealthy
individuals somehow curb economic growth," said Democratic
Representative Chris Van Hollen, a member of the House
leadership from Maryland.
A spokeswoman for Senator Orrin Hatch, the top Republican on
the tax-writing Senate Finance Committee, applauded the CRS for
revising its report, but said it was still reviewing the 22-page
"Hats off to CRS for hearing out our concerns and agreeing
that the report needed to be modified to reach their standards,"
spokeswoman Antonia Ferrier said. "What is disheartening,
however, is that a simple conversation between staff and CRS
about their economic analysis was turned into a political
football by Democrats."