Tax Cuts Don't Lead to Economic Growth, a New 65-Year Study Finds

[xchrom]

http://www.theatlantic.com/business/archive/2012/09/tax-cuts-dont-lead-to-economic-growth-a-new-65-year-study-finds/262438/



Here's a brief economic history of the last quarter-century in taxes and growth.

In 1990, President George H. W. Bush raised taxes, and GDP growth increased over the next five years. In 1993, President Bill Clinton raised the top marginal tax rate, and GDP growth increased over the next five years. In 2001 and 2003, President Bush cut taxes, and we faced a disappointing expansion followed by a Great Recession.

Does this story prove that raising taxes helps GDP? No. Does it prove that cutting taxes hurts GDP? No.

But it does suggest that there is a lot more to an economy than taxes, and that slashing taxes is not a guaranteed way to accelerate economic growth.

[KegCreekDem]

1. Thanks for posting this ...

This is good ammunition for the Repugs I work with.

[porphyrian]

2. Don't introduce factual data! They got Jeebus! n/t

[a geek named Bob]

3. hmmm...

The GOP must be praying to that supply-side jeebus... instead of that commie, share what you can, help the poor and downtrodden jeebus...

[porphyrian]

7. Amen! n/t

[Hubert Flottz]

4. Yes thank you for posting.

:kick:

[lunatica]

5. Yeah, well just wait till that 70 year study comes out

There will be job creations galore by the 1%. It's not fair to make such a knee jerk conclusion on such a short term study.

[xchrom]

6. ...

[edhopper]

8. We know the GOP

will never accept factual data if it is counter to their ideology. But the shame is that the Media will not simply state that it is now proven that Tax Cuts do not stimulate the economy. They will continue with the he said / she said bullshit.
Like the recent NY Times article that gave "both sides" to the voter fraud / suppression debate, ignoring their own story that showed there is no voter fraud, they will not tell the American people the truth.

[Ikonoklast]

9. So that's what a a graph of "Trickle Down" looks like.

All the money trickles down into the off-shore secret bank accounts of the massively wealthy in the Cayman Islands, and the rest of us get jack squat.

[Proud Liberal Dem]

10. We needed a 65-year study to tell us this?

It should've been pretty obvious to most people for the past 30+ years IMHO- but propaganda dies hard.

[mopinko]

11. more news from the dept of duh.

[FredStembottom]

12. Money is the blood of an economy, it seems.

The better it circulates (taxation), the more the entire national body thrives (as long as that circulation is kept largely within the body - borders).

Tax cuts centered on a wealthy few cause stagnant pools of unproductive money. The national body's blood supply becomes occluded and disease sets in.

[hfojvt]

13. I would note the 2nd chart

There is a public myth, believed also by many on DU, about loopholes.

The myth says that

1. Back in the old days when rates were higher, the rich didn't really pay higher rates because of all the loopholes.

Not true - according to the chart, the top .1% and the top .01% were paying over 40% generally - until Reagan slashed the top rates.

2. Raising the top rates would not make the rich pay more, they would still dodge most of those taxes with their loopholes

That is no more true than the first statement, although there probably are loopholes that should be closed. As I have said a number of times on DU, we should get rid of Schedule A. It would simplify taxes and most of the benefits of Schedule A go to the upper half.

Further, I would say that all the tax cutting has increased the inequality between the top 20% and the rest of us, not just with the top .1% or the top .01% or even the top 1%.

In 1967, for example, the bottom 40% got 14.8% of the National Income, the top 5% got 17.5% and the next 15% got 26.3%.

By 2005 the share of the bottom 40% was down to 13%, the top 5% up to 22.2% and the next 15% UP to 28.2%.

[Gregorian]

14. If you're thirsty, just get a smaller cup.