Democrats decry withdrawal of tax report

A top Democratic tax-writer said Thursday he wants to know why a nonpartisan research service withdrew a report over tax rates and their impact on economic growth.

Rep. Sandy Levin (Mich.) said he was disturbed that the Congressional Research Service withdrew the report because of political pressure, after The New York Times reported that Senate Republicans had taken issue with the study.

“It would be completely inappropriate for CRS to censor one of its analysts simply because participants in the political process found his or her conclusion in conflict with their partisan position,” Levin, the top Democrat on the House Ways and Means Committee, wrote to CRS leadership.

Levin, in a letter to the CRS director, Mary Mazanec, also said he wanted to know who made the decision to pull the report, and that “subjecting CRS analysts to political considerations undermines the legislative process and the American people’s trust in it.”

Other top Democrats — like Sen. Charles Schumer (D-N.Y.), who cited the study in a speech on tax reform last month — have also criticized the decision, and Republicans' role in it.

The CRS report, published in September, came as lawmakers on both sides of the aisle were preparing to deal with the tax issues in the so-called fiscal cliff, and as some were also trying to lay the groundwork for a full-scale overhaul of the tax code.

Janine D’Addario, a spokeswoman for the research service, said she would not discuss why CRS decided to pull the report, which was first published in mid-September.

But she did tell The Hill that “to my knowledge — and I have been at CRS for a long time — CRS has never withdrawn a report based solely on the input of members or a congressional committee.”

The Times had reported that the report had been withdrawn despite complaints from the service’s economics division, and that author Thomas L. Hungerford has reportedly stood by his findings. Hungerford, who has given thousands of dollars to Democrats this campaign cycle, did not respond to a request for comment.

D’Addario said that the decision was made by a number of senior officials at CRS, and that the economics team was consulted on that decision.

The study touched on one of the hot-button issues in the debate over tax policy — whether cutting rates can spur economic growth, as many Republicans assert. 

But Hungerford, in looking at tax rates since World War II, found little to back up that assertion.

“Changes over the past 65 years in the top marginal tax rate and the top capital gains rate do not appear correlated with economic growth,” he wrote. “However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution,” he added.

Staffers for Senate Republicans have confirmed that they lodged complaints over the report, and pushed back on the report quickly after it was originally released.

Antonia Ferrier, a spokeswoman for Sen. Orrin Hatch (Utah), the top Republican on the Senate Finance Committee, said in a release Thursday that the CRS report was “highly questionable” and employed “loaded political language.” 

Ferrier also termed GOP conversations with CRS as “constructive,” and circulated criticisms of the study from the Tax Foundation and George Mason University. 

Those criticisms knocked Hungerford’s study for only taking into account income and capital gains tax rates and for looking for economic impact after only one year.

The response from the two groups echoes a long-term discussion over whether official budget scores should take economic growth into account. Republicans say that would be more accurate, but many Democrats have said that so-called dynamic scoring is rife with uncertainties and underplays the true cost of tax cuts. 

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