New Tax Credits
A variety of new tax credits for self-employed and low- income workers, homeowners, and parents of college students
would ensure that no families making under $250,000 would see a tax rise (who here would get hit, if this is the plan?), they said in the conference call. The average real tax burden for those earning $1.5 million a year would increase to about 25 percent from about 21 percent they pay now, Goolsbee said in the call.
Furman and Goolsbee said Obama's plan would result in a tax burden amounting to 18.2 percent of the economy. The Congressional Budget Office says the tax bite this year will be 18.7 percent of gross domestic product, rising to 19 percent in 2009.
Former Treasury Secretary
Lawrence Summers, an Obama adviser, said Republicans were wrong when they warned of economic disaster in the 1990s because of the tax policies of then-President
Bill Clinton. During that time, the U.S. experienced a period of sustained economic growth.
``The idea that a return to the tax policies of the 1990s would somehow damage the economy in some substantial way is supported by neither theory nor evidence nor the longer-term history,'' Summers said.