The report concluded, “The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth.”
“The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth,” the report continued. “The top tax rates appear to have little or no relation to the size of the economic pie.”
It also argues that “the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.”
The conservative Heritage Foundation argued that the CRS report “failed” in its logic.
“In fact, these stylistic correlations prove nothing,” Curtis Dubay wrote for Heritage’s Foundry blog. “In short, the economy is more complicated than this simplistic approach can acknowledge. For the analysis to prove anything, it needed to account for countless other economic and policy factors, many specific to a given period, and determine how those factors influenced economic growth in the period in question. With this as background, the analysis would then have to isolate the effect lower rates had on growth.”
Dubay argued that CRS is normally “admirably and diligently” objective in their analyses, but that “the longstanding episodic exception has been in tax policy.”
CRS reports are only distributed to members of Congress and their staffers, who can choose to distribute them to the press, as occurred with this report.
After the report’s release, The New York Times, San Francisco Chronicle, CNBC and BusinessWeek, among other media outlets, ran headlines touting the report. The liberal Huffington Post ran a headline that said tax cuts “linked to income inequality, not economic growth.”
Liberal advocacy organization ThinkProgress — the media arm of progressive Center for American Progress — claimed victory too.
Ryan’s congressional counterpart, Maryland Rep. Chris Van Hollen — the ranking Democratic member of the House Budget Committee — touted the report as well.
“This report confirms that Republicans’ trickle-down economics policies lifted the yachts while the boats ran aground,” Van Hollen said in a statement to TheDC. “The 2001 and 2003 tax cuts, tilted toward the wealthiest Americans, did not deliver the economic growth Republicans promised. Jobs went down while deficits shot up. Yet the GOP wants to double down on this failed approach. There are many good reasons to overhaul our out-of-date tax code — but giving bonus tax breaks to millionaires and special interests is certainly not one of them.”
Van Hollen’s press staff didn’t answer follow-up questions about whether CRS should prove the report really is nonpartisan.
A representative for Michigan Rep. Sander Levin — the ranking Democratic member of the powerful House Ways and Means Committee, which has jurisdiction over tax policy — did not respond to TheDC’s request for comment.
D’Addario said she doesn’t think the CRS owes any public explanation about the author’s Democratic involvement, since her agency serves Congress exclusively.
“It is well known certainly to the Congress — which is whom we work for exclusively — that the work of the Congressional Research Service is objective, nonpartisan and confidential,” she told TheDC. “That is well known. Our work is intended to be confidential to the Congress, but we do know our work is distributed more widely not by us but by others.”