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Former CBO Director Douglas Holtz-Eakin argues that increased taxes and new spending cuts could derail the economy.
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Now yesterday -- would have an economic debate with Democrat strategist Mark -- He also made what would calling a surprising statement about the economy he says.
All serious economists all in favor of raising tax rates -- let us.
Every serious economist -- looked at this problem.
Democrat -- Republican has said.
You have to increase in taxes to get the revenue that we know which I do I'll Douglass told Holtz -- who was the chief economic advisor to to Mitt Romney -- serious economist.
And he has said the -- raise revenue.
-- -- -- Douglas Holtz Aiken joins us now we wanna clarify he is not affiliated with the Romney campaign in any way good morning to you dog now let's get this right around the -- on all you in favor of raising tax revenue all raising tax rates aren't.
I'm not mom.
I also want to correct the record he set art Laffer not a serious economist I don't want are coming after -- shuttle the ho ho hum.
Look we know the dangers of raising taxes and in fact.
Today Mike my forum American action form has a new paper out about the dangers of doing exactly what the Democrats are threatening which is running the fiscal cliff this is.
Three million jobs in great damage the small business community so no should be in favor of that and our problems in the budget on the spending side story you know them.
And we need to get serious -- controlling.
So for the benefit of those those people own I have myself included who are not really a fully up to speed on the fiscal cliff.
What you're talking about is a massive increase in taxes come January the first and a huge cuts in spending come January the -- that's correct -- that's the fiscal cliff.
Yeah that's 400 billion dollars in tax increases 200 billion dollars in spending cuts that's about 4% of GDP.
As you know we're growing at bested 2% so we're gonna hit an economy that's struggling along with something twice as big as the year's growth but we're not gonna do it all I mean I I I -- I can't see any political party.
Actually going for -- massive tax increases and huge spending cuts at the same time I can't say.
The New York Times is reporting today that the Democrats are mulling a strategy -- hasn't let let's hit let hit the economy with a big tax increase.
And then force Republicans to adopt the president's proposal to raise taxes.
-- small businesses and the upper income Americans so.
Yes someone is thinking about it but.
What we wanted to show on the paper is that the damages that come from doing that's about the economy as a whole three million jobs.
A decline in in GDP that produces a recession.
And the damage to the small business community and being.
But this really can't careless with tax rates that you really have to be careful not to hit that part of the economy.
What do you make and forget the fiscal -- for 12 I believe it is -- -- -- was declared policy.
To raise the tax rate on up but incomes.
To raise the tax rates on interest dividends and capital gains and on health insurers and health insurance policies and Biotech company is.
And a whole list of other attacks and that's separate from the fiscal -- -- is -- right.
Of tax increases declared policy by the president wouldn't that help job creation at all what -- -- due to the economy.
That's bad economic policy and is not all declared -- some that's -- the Health Care Reform.
Has higher taxes on -- investment income interest and dividends it has taxes on medical device companies and innovation so.
-- this isn't hypotheticals.
About where bearing the cost of some of that already.
And if we do more -- will grow even more slowly.
His own fiscal commission showed him the way too -- it's -- rationality which is.
Do -- tax reform.
That lowers rates broadens the base that's much better for growth it was supported by Democrats and Republicans and it doesn't raise rates yes the lesson of that commission -- tax.
Reform right I mean you lower the right to cut out some deductions you reform the tax system and that brings in more revenue that's what you'll fall correct.
That's exactly what I'm for and by the way if you look at the historical record of countries that have our problem big -- and that growth.
Tax reforms one part of the solution we need to get on this as fast with him.
Douglas Holtz Aiken thanks for joining us always appreciate -- thank you -- Mark Mellman said one more thing you've already just a moment ago we want to clear this up as well business.
You cannot tell me that every serious I'm telling you his belief is that raising taxes brings in more revenue over the limestone aggregate -- most.
Almost every serious economist -- black what you don't call him serious all -- that's correct I don't problems here.
-- whole whole -- -- but we asked art -- to come on he responded that with this from his spokesperson he said look.
If he tried to respond every time a liberal resorted to ad hominem attacks rather than citing factual theory he wouldn't have much time to do anything else all right thank you very much and they don't laugh --
