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Manhattan Institute senior fellow Diana Furchgott-Roth argues raising tax rates will stifle economic growth.
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My next guest says forget taxes Washington needs to focus on cutting entitlement spending if we want to prevent a battle between old and young Americans.
-- at birth got -- senior fellow at the Manhattan institute and former Labor Department chief economist joins us now with more.
-- it seems to me that raising the retirement age is like the simplest thing you could do and yet -- -- not talking about that.
Well -- seven they should be because cut of the the deficit problem a great -- is entitlements.
Social security and Medicare.
Keep adding fiscal buttons as people's life expectancy increases and it's great that people are living longer.
But when Social Security was -- thought out.
The life expectancy was only 67 -- around 85.
We need to be raising retirement ages -- somehow thinking about cutting back on benefits to keep these programs in balance -- on the other side of this issue obviously is coming down to -- two years ago the president said he didn't -- -- let taxes go up -- August.
GDP growth was so low.
-- how can you make that argument two years later today GDP still struggling to get any traction.
Well he should be making that acumen because GDP growth now this year as -- 2%.
Was it 2.5 when he made that argument in twenty -- so there's even more reasons not to get tax rates high yeah.
Not to allow them to go high -- and the only way we're gonna get out of this fiscal mess is through more economic growth.
And if we raise tax rates that's going to stifle economic growth.
We need to be keeping tax rates the same as they that small businesses have incentives to was invest.
And get more revenue through economic growth.
Not -- high attacks.
It's interesting though that they're talking about it so furiously because we've seen in the past.
The wealthy in particular.
They can hire the right people they can tax plan accordingly they don't raise the tax revenue they expect to raise.
Half of them quite frankly will just park their money overseas and we won't get the benefit the burden on -- -- -- on the middle class.
Yeah we've seen that again and again and we've also seen that when taxes go down we have frequently got more revenue than the Congressional Budget Office.
House book -- like in the middle of the last decade when capital gains tax rates went down.
-- look.
The best way to generate revenues is through growth.
There's no doubt about that.
How could a deal that's thrown together at the last minute actually thought growth in this country.
Well they could cut growth by -- increasing top tax rates.
If you're a small business and your taxes go from -- 5% to 42%.
As that -- to do.
-- the phase out of exemptions.
An itemized deductions that's gonna mean that you're not gonna and buck on seven projects that you might have done otherwise and about half of business income.
Is taxed at that 35%.
Rate.
And I have they're listening to you because you make sense they're not making sense these days stay and a -- -- Roth thank you.
Thanks very -- uniting not cope with.
