Those job-killing tax increases, they are a problem. Just listen to any member of the GOP talk about the economy, budget, or government, and you will hear the refrain; “Tax increases kill jobs!” As an advertising slogan, it is only slightly less ubiquitous than “This Bud’s For You” or “Always Low Prices”. To be clear, I understand that conservatives do not like taxation, that they believe taxes support functions that shouldn’t be handled by the democracy, that any taxes should be flat taxes. These are all respectable, perfectly understandable ideological concepts. I disagree with them, but accept them as viable arguments.
Constantly labeling taxes as “job-killers” is another matter entirely. Constantly labeling taxes as job-killers is at best an unsupported assertion, and at worst an outright lie. There is nothing wrong with arguing the concept of taxes, or about what they support, but you need to show proof to make the affirmative statement that they kill jobs, and the proof just isn’t there. We covered this topic here before, but it bears repeating; no matter how you slice it, no one has ever been able to point to a period where tax cuts, by themselves, generated GDP growth or accelerated job creation. In fact, the opposite is true. We the people have two shining, large scale examples in the recent past to look at; the Clinton tax increases that came with the Deficit Reduction Act of 1993, and the Bush tax cuts of 2001 and 2003.
The U.S. economy, after the Clinton tax increases, grew at nearly twice the rate as it did after the Bush tax cuts. One can look at five year periods after implementation (to exclude recessionary effects on the data) or 10 year periods to account for everything. One can leave the GDP data in its raw form, or one can adjust the data to reflect the effects of the asset bubbles that featured in both time periods (a stock bubble during the 90’s and the housing bubble after the turn of the century). This information can be found in easy to handle formats, for free, and instantaneously through the Saint Louis Fed. Look it up, and if you can make a mathematical argument that tax increases hurt the economy, or even limited the economy, let The Rational Middle know.
And let Mitch McConnell know as well; he is committed to repeating his “job-killing tax increases and spending” mantra as often as possible. That he is absolutely wrong on the facts doesn’t seem to matter. That his vision for legislation is, literally, a job-killing vision doesn’t seem to matter. Conservatives like McConnell live to argue that taxes and government spending kill jobs through circuitous economic realities, when the very act of cutting government spending directly kills jobs by forcing program terminations, layoffs, and limiting consumer demand. The simple reality is that the overwhelming majority of tax revenues get spent in the U.S. economy. Take a quick look at Yahoo Finance or CNN Money and see how much of the savings U.S. companies have received from tax cuts, tax shelters, and tax credits those firms have spent in the U.S. economy.
U.S. corporations don’t see current demand rising, and they aren’t asking current workers to work more hours; there is no need for companies to invest in current spending like payroll expansion. Uncertainty over the direction of the economy further raises the bar for what companies must return on any given capital investment. The only way to change this paradigm is to push consumer spending; if the private sector won’t do it, the government of the people can. Going a little further, small marginal increases in the tax rate make it more appealing for firms to invest profits in capital projects and hiring. These concepts aren’t new or revolutionary, and they are built on a solid, lengthy, and supportable foundation of economic data from both public and private sources.
What is revolutionary is the grand conservative idea that tax cuts are the miracle drug that works miracles. They have been pushing this mantra for decades know, and we the people have given the notion every chance to succeed. Taxes on the most successful businesses and individuals are less than half of what they were at any time between WWII and 1981. Taxes are less than they were in the period between 1985 and 2000. Is the economy now in better shape than during the aforementioned periods of time? With all of that data pointing away from more tax cuts as a solution, why do these folks continue to demand tax cuts as the only solution?
There is no data that suggests tax cuts are helpful to the economy, so why would conservatives demand them (and refuse to consider raising taxes) in a discussion about deficit reduction. The argument is ridiculous…
Our budget deficit is out of control, it is the greatest problem we face, and we have to close it…without addressing revenue.
I can assure you that the previous statement would get you fired from any Fortune 500 company, but for the fake pro-business stooges in Republican Party politics, it is perfectly logical. The math doesn’t work, but rather than accepting that they are playing a weak hand, conservative political types change the argument by falling back on the libertarians who seem to be the only thinkers left on the right side of the aisle. The libertarians don’t want the taxes, and have no problem cutting the spending to match. While I disagree with the concept, there is at least honesty in the notion. Mitch McConnell, Eric Cantor, John Boehner and the rest are pretenders to the libertarian mantle, and long ago abandoned the path of intellectual honesty….
But they are world-class carnival barkers and snake oil salesman. The conservative leadership in our nation may be very good at staying on message, they may be fabulous at sloganeering, but we the people need adults with calculators at the helm of our great enterprise.
The Rational Middle is listening…