So DO Tax Cuts Create Jobs?
Whoa, did you see what happened after Bush cut taxes for the rich? Do you remember what happened after Bill Clinton got taxes increased on the rich?
My own 2010 post, Did The Rich Cause The Deficit? included this chart, (The red line is the tax rates, the blue is growth and the red arrow shows the trend.
But, from that post, one thing that cutting taxes on the rich obviously does cause is deficits:
And deficits cause government to cut back, cut infrastructure projects, cut the things government — We, the People – does for We, the People. And the economy slows…
The real job creators are working people with money in their wallets.
Tax the rich, use the money to modernize our infrastructure and help regular working people. Build roads, schools, bridges, ports, airports, dams, courthouses, wind farms, water systems, high-speed rail, municipal transit systems, all the things that make our economy efficient and competitive…
(PS I also came across a chart showing that lowering capital gains rates correlates with lower, not higher, economic growth. But somehow we knew that would be the case…)
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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H. Seelye:
October 14th, 2012 at 2:05 pm
This is a very cogent argument, yet I do not hear (or see) it used by those who oppose the current trend to create austerity -especially in our state institutions, i.e., our schools, state and county services.
Why? It is the most amazing thing to watch people advocate and vote for policies against their own self interests! Why? Again, I am puzzled. Why is the lie -even when revealed, so powerful? The answer to this might set us back on a road to governmental and social well being.
Great article.
Avedon:
March 31st, 2013 at 4:49 pm
You left out the part where high taxes on the rich mean they have less money to spend buying government and generally bribing it into doing things that hurt job growth.
Kaleberg:
April 1st, 2013 at 11:25 pm
I’m glad to see a lot more progressives picking up these straightforward arguments and simple facts. For a long time I felt like a voice crying in the wilderness. Yup, the job creators are ordinary folks with money in their pockets.
You can actually take this analysis back further. For example, the boom of the late 1860s and early 1870s was spurred by the high taxes and high government spending in the Civil War. (Studebaker was just one of many long lived companies that got their start supplying the Union army.) The war taxes of 1917 and on drove the Roaring 20s. Sure, there was a lot of innovation going on, but someone needed an excuse to raise wages. In fact, it was the 2-3 order of magnitude increase in manufacturing productivity combined with relatively flat wages that led to teh Great Depression.