Making Labor Less Expensive Helps Firms Hire

President Obama Has Repeatedly Urged Congress To Let The Bush Tax Cuts Expire For Those Earning More Than $250,000 A Year. Increasing Rates On Top Earners Is An Obvious Way To Raise Revenue From Those Who Can Afford It Most.

Our Estimates Suggest That A Tax Increase Of 1 Percent Of Gdp Reduces Output Over The Next Three Years By Nearly 3 Percent. The Effect Is Highly Significant.

I Think Where I Differ A Little Bit, We Absolutely Have To Think About The Deficit Looking Down The Road. And Certainly That's Something The President Has Said That We Need To, As The Economy Recovers, Have A Plan In Place For Getting It Down.

If Every Other Store In Town Is Paying Workers $9 An Hour, One Offering $8 Will Find It Hard To Hire Anyone - Perhaps Not When Unemployment Is High, But Certainly In Normal Times. Robust Competition Is A Powerful Force Helping To Ensure That Workers Are Paid What They Contribute To Their Employers' Bottom Lines.

If Increasing Income Equality Is The Goal, It Might Be Wiser To Put Money Into Infrastructure Than To Subsidize Manufacturing. Construction Also Pays Good Wages, But With Lower Educational Requirements. And America's Infrastructure Needs Are Enormous.