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CLINTON PLAN WILL ABORT 2.3 MILLION JOBS, MACKINAC ECONOMISTS SAY

 MIDLAND, Mich., March 29 /PRNewswire/ -- President Clinton's proposed package of higher taxes will prevent the creation of 2.3 million jobs over the next six years, say two distinguished Michigan economists.
 David L. Littmann, chief economist for Comerica Bank, and Gerald L. Musgrave, president of an Ann Arbor consulting firm called Economics America, made the claim today in a paper for the Midland-based Mackinac Center for Public Policy. Both men are members of the Advisory Board of the Mackinac Center, an independent research and educational organization.
 In the Clinton plan, the 1.2 percent of Americans earning more than $180,000 per year will see their marginal tax rates rise to 36 percent from 31 percent. That, plus an added 10 percent surtax on those making over $250,000, is projected to yield the federal government an additional $31 billion in the first year of the Clinton plan. Littmann and Musgrave estimate that approximately $25 billion of that would otherwise be saved and invested in the private sector.
 "Individuals in the upper income brackets save and invest a much larger portion of their total incomes each year than do those at middle or lower income levels," say Littmann and Musgrave. "The president spoke of investment or savings no less than 28 times in his speech to Congress announcing his plan, but proposes to tax away a huge amount of potential savings and investment funds."
 The two economists cite the administration's estimate that the total revenue from the proposed higher taxes on personal income will be $126.3 billion over the next six years. Increasing corporate taxes will bring in another $30.6 billion. Littmann and Musgrave calculate that, because of the tax hikes, the net reduction in total private investment will average "at least $20 billion a year."
 That reduction, claim Littmann and Musgrave, translates into a loss of nearly 400,000 jobs per year over the next six years -- or 2.3 million in all.
 "The average job in the private sector now requires a capital investment of $52,000. Michigan's automobile industry requires an investment of $46,256 per job. The president's program will make sums like that scarcer, destroying jobs in the process," according to Littmann and Musgrave.
 -0- 3/29/93
 /CONTACT: The Mackinac Center for Public Policy, 517-631-0900/


CO: The Mackinac Center for Public Policy ST: Michigan IN: SU: ECO

JG-ML -- DE010 -- 0418 03/29/93 10:32 EST
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Date:Mar 29, 1993
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