"Does anyone actually have data showing that giving millionaires tax breaks creates jobs? How many jobs would that be? For all those who claim that it is so, please provide the data so we can have an honest discussion about it.
A table would be nice: in the left hand column, the income bracket and the tax breaks based on the current rates; in the right hand column, the number of jobs created. You know, what we in the old days used to call 'facts' to back up the argument that we need to bail out the rich because they need to get richer because 'everyone knows' that what follows is jobs (aka 'trickle-down theory' or Reaganomics). Really? If it worked so well, where are the jobs now? And did you know who said 'money was all appropriated for the top in hopes that it would trickle down to the needy'? That was Will Rogers during the Great Depression. Some ideas never die, no matter how many times they fail.
The justification for DC's refusal to fix a problem caused by tax cuts on the rich by restoring taxes on the rich is that you can't raise taxes on the rich during a recession. The oft-repeated idea that taxes "take money out of the economy" has become so ingrained that there is no discussion at all, it is just accepted as a given. It is "conventional wisdom." It certainly is a convenient conventional wisdom for the wealthy, but it is a fact?"
Dave Johnson at Campaign for America's Future says:
Let's look at some counter-arguments:
1) Tax cuts for the rich means borrowing. This is the root of the "taxes take money out of the economy" argument because the resulting borrowing pumps into the economy, which is stimulative. If you stop the borrowing the resulting stimulus is withdrawn. Of course, tax cuts are the least-effective stimulus, especially when it is top tax rates we are talking about, but still... Unfortunately we have been borrowing a lot for a long time to pay for tax cuts at the top, so massive debt has accumulated and the interest paid (guess who it is paid to) on the borrowing is significant and anti-stimulative. (Don't interest payments "take money out of the economy?")
2) Taxes bring in revenue to pay for improvements in infrastructure that cause the economy to grow. Investing in modern transit systems, smart grid, energy efficiency, fast internet and other improvements leads to a huge payoff. Infrastructure improvement and maintenance is the “seed corn” of economic growth. We have been eating that seed corn since Reagan’s tax cuts. Some might argue that we can just borrow to invest in infrastructure -- but we don't. One result of the Reagan tax cuts was a cutback in infrastructure investment, which is dissed as "government spending." (For some reason the same borrowing to spend on tax cuts is not dissed.) After 30 years of Reaganomics our infrastructure has fallen behind and we are not competitive in the world economy.
Taxes also bring in revenue for improving our schools, colleges and universities. Not only does this help our economic competitiveness, education improves each of our lives and our level of happiness. (And more education helps people who end up on deficit commissions to understand that tax cuts for the rich cause deficits which can be fixed by putting top tax rates back where they were before the deficits that they caused.)
Jon Ponder of Pensito Review:
"A Republican plan to extend tax cuts for the rich would add more than $36 billion to the federal deficit next year — and transfer the bulk of that cash into the pockets of the nation’s millionaires, according to a congressional analysis released Wednesday."
NYTimes' David Leonhardt:
"Those tax cuts passed in 2001 amid big promises about what they would do for the economy. What followed? The decade with the slowest average annual growth since World War II. Amazingly, that statement is true even if you forget about the Great Recession and simply look at 2001-7.
The competition for slowest growth is not even close, either. Growth from 2001 to 2007 averaged 2.39 percent a year (and growth from 2001 through the third quarter of 2010 averaged 1.66 percent). The decade with the second-worst showing for growth was 1971 to 1980 — the dreaded 1970s — but it still had 3.21 percent average growth.
The picture does not change if you instead look at five-year periods. Here’s a chart ranking five-year periods over the past 50 years, in descending order of average annual growth:
Nevertheless, every Republican in Congress and many of the Democrats are clamoring to extend the Bush tax cuts because they will create jobs.
Really, if I have to hear a fairy tale, I’ll just stick with my toddler’s library."
I hope the Obama administration sticks to their resolve to end tax cuts for the super wealthy. History shows those tax cuts do not create jobs, but in fact, increase the deficit.
