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A tax study convenient for Obama

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Two months ago, President Obama strode into the White House East Room to tout his "Extending Middle Class Tax Cuts" agenda and, of course, thump his Republican presidential opponent, Mitt Romney. He said, "The GOP's so-called small-business tax proposal could actually discourage firms from creating jobs or making new investments this year, while giving away tens of billions of dollars to millionaires and billionaires."

Two weeks ago, the Congressional Research Service released a 23-page report titled "Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945." It contains text for nine charts on savings, investment, labor productivity, growth and top tax rates, two tables -- economic growth and income inequalities -- and multivariate regression equations to prove it all. It says tax cuts for upper income brackets don't lead to economic growth.

Just what Obama needed -- something authoritatively impenetrable from the CRS to distract voters from the limp economy and to give the press corroboration that Romney would tax the poor to help the rich.

In his East Room speech, Obama praised the Tax Policy Center for noting that his tax plan would hurt only the top three percent of businesses. He also bragged, "This has been confirmed by the independent Congressional Research Service."

But neither Obama nor the CRS mentioned that the TPC also stacked up his fiscal 2013 budget's tax proposal beside Romney's competing proposal.

If you actually study the Tax Policy Center's side-by-side comparison, you find that Romney's proposed tax rate is indeed lower than Obama's for the wealthy (those making $388,350 and more) -- 28 percent under Romney versus 39.6 percent under Obama.

But importantly, Romney's proposed tax rate is lower than Obama's for every income bracket -- including the poor and the middle class. For a married couple filing jointly with taxable income from $17,400 to $70,700, Obama's tax rate is 15 percent. Romney's is 12 percent. In the bracket above, $70,700 to $142,700, Obama wants 25 percent, Romney only 20 percent. It's that way up and down the brackets. Obama wants higher taxes than Romney. The president has no clothes.

Perhaps that's why the Congressional Research Service published "Taxes and the Economy" when it did. It was written by Thomas L. Hungerford, specialist in public finance. CRS declined to discuss the report with me, saying, "All of our work is confidential, nonpartisan and objective."

As I explained in a previous column, CRS is part of the Library of Congress and works exclusively for the U.S. Congress, "providing policy and legal analysis to committees and Members, regardless of party affiliation." The catch is that CRS also publishes reports on its own initiative, according to congressional sources. One source told me, "CRS staffers do reports on their own all the time." Another said, "I can tell you that most of the CRS analysts are card-carrying leftists. ... They constantly coordinate with Democratic staff on their reports, but rarely reach out to Republicans."

That may be an overstatement. And Hungerford's competence is not at question. He is well-published in the professional literature and his resume shows employment by the Social Security Administration, the Office of Management and Budget, and the General Accounting Office before coming to CRS.

But CRS is not a high priesthood of perfect and mathematical objectivity, either. Hungerford gave $3,400 to Obama's campaign in 2008 and $500 in 2012. He spread $2,450 among three Democratic political committees. If he did not coordinate with Democrats on "Taxes and the Economy," it was certainly released at a convenient time for Obama's campaign.

Examiner Columnist Ron Arnold is executive vice president of the Center for the Defense of Free Enterprise.

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Ron Arnold

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The Washington Examiner