CHART: Lower Taxes On The Rich Don’t Lead To Job Growth

[xchrom]

http://thinkprogress.org/economy/2011/06/28/256605/chart-lower-taxes-on-the-rich-dont-lead-to-job-growth/

Congressional Republicans — during both last year’s debate over the pending expiration of the Bush tax cuts and the current negotiations regarding raising the nation’s debt ceiling — refused to consider tax increases on even the very richest Americans. In fact, House Majority Leader Eric Cantor (R-VA) blew up debt ceiling negotiations last week due to his insistence that those making more than $500,000 annually be shielded from any tax increase.

The GOP justification for its position — even with income inequality at its worst level since the 1920s — is that raising taxes on the rich will destroy jobs. “What some are suggesting is that we take this money from people who would invest in our economy and create jobs and give it to the government. The fact is you can’t tax the very people that we expect to invest in the economy and create jobs,” said Speaker of the House John Boehner (R-OH).

However, history doesn’t back up the GOP’s claim. In fact, as Center for American Progress Director of Tax and Budget Policy Michael Linden found, “in the past 60 years, job growth has actually been greater in years when the top income tax rate was much higher than it is now”:

[lunatica]

1. No matter how many times this is proven it doesn't change anything

For the Republicans, and especially for the Teabaggerati, opinion, no matter how ill informed trumps facts.

[vi5]

2. Wow. You'd think someone might point this out?

Some one or several people on "our side" who have bully pulpits. You'd think they might pull out this chart to show the American people....you know...some actual evidence that the Republicans are full of shit.

But nope. Nothing we can do about it. Darn Republicans. That's just the way it is. Let's all shrug our shoulders and pat our leaders on the back and give them some "attaboys" for just trying their best.

[xchrom]

4. I wonder who that would be? Nt

[IndyPragmatist]

3. While true, that article is crap

The author only looked at 2 variables, the top marginal income tax rate and growth. Ummmm, okay.

I could post a chart that shows the increase in population is correlated with the growth in television sales. Does that mean they have anything to do with each other? Nope. Could they? Maybe. But the point is, using two variables like growth and tax rates is ridiculous.

His chart shows its flaw on the far left. If there was a real correlation, then the lowest tax rate wouldn't be much higher than the next two.

I just so frustrated when people use crap like this to prove a point. It's often counter-productive. If you know what you are looking at, you know it says nothing. I hate it when people act like they have proven something when they haven't even done anything close to that. That chart assumes that nothing else going on in the world has much of an impact on growth, only the top marginal tax rates can impact growth. That is just flat out wrong.

[Dawgs]

6. Bullshit. It's the Republicans making the argument that 'tax cuts only' spur growth and jobs.

If you want to get mad at someone then get mad at them.

Thinkprogress is only pointing out, using the Republican argument, that tax cuts ALONE do not improve the economy and create jobs.

They are also NOT saying that higher taxes spur growth, like you're implying. They are saying that when taxes are higher the economy has done better - which sounds like the same thing, but is not. The point is that the Republican argument, that lower taxes is best for the economy, is wrong.

See the difference?

And, did you even read the article, or just look at the chart?

You, "If there was a real correlation, then the lowest tax rate wouldn't be much higher than the next two."
Thinkprogress, "In the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation."

[IndyPragmatist]

7. Yes, I read the article, had I tried to turn in something like that in an econ class,

My professor would have laughed me off campus. The author is correct that lower tax rates have not proven to spur economic growth. They ARE trying to convince the reader that increasing taxes on the rich will lead to more growth. There is just as little evidence of this as there is that lower upper tax rates increase growth. It's a terrible argument that doesn't prove anything.

I deal with sneaky journalists everyday. They try to get away with stuff by implying it in an article, and when questioned they always respond with "I didn't say those words." If I said that the Mavericks won the NBA finals, I would imply that the Heat lost. I never said "The Heat lost the NBA Finals" but it was implied in the statement. This is what the author is trying to accomplish and I dont like it.

This is similar to the Climate Change debate. You have scientists that are competing for recognition and they all want to have some groundbreaking findings for their reports. What happens far too often is they focus on the worst case scenario, and imply that this is what will happen. They ignore the more likely outcome and focus on the worst possible outcome. The Untied Nations said there would be something like 50 million climate refugees by 2010. This was the worst case scenario, but because they focused on that, and it turned out not to happen, they entire report has been discredited. Other climate change studies are discredited because many have seen evidence of other predictions being way off. They don't trust the movement because of a few poor decisions by some individual scientists.

If this author keeps implying that higher tax rates will increase growth, he will not only lose his reputation in time, but he will fuel the opposition. The way most people think is, if A & B are opposites, and A=X, then B must equal the opposite of X. This doesn't always work out. And tax rates are a perfect example of this. Personally, I wish we would get away from trying to tinker with the economy at every opportunity. In the 90s and 2000s, we thought backing mortgages with Freddie and Fannie would only cause good things. Well, come to find out, it was a major factor in the housing crisis. We don't fully understand the economy, but we have leaders who act like they know everything there is to know about it. The economy is not some static object, it is the decisions of billions of people on this planet. We have no way of knowing exactly how people will react in certain situations because there are a nearly infinite number of variables that play into these decisions. I just don't like the attitude of some that think they know everything there is to know about economics.

[Dawgs]

9. Thinkprogress is a political site. The article is making a political argument.

It's answering a political argument("talking point") that the republicans are making.

It really has nothing to do with economics.

[Dawgs]

5. (see chart image here)

[toddwv]

8. I disagree.

Since taxes have been dropped there has been HUGE job growth...just not in the United States.

[nc4bo]

10. Ben Stein must have repeated this 10 times last night on fox news...

Yo, don't even ask how I tripped into watching that segment, it was a mistake!

Not sure who the blond bimbo was but he hammered this point several times only to be told over and over again that higher taxes on businesses and the rich destroys economies.

This is what we're going to be up against and worse, most of the people who watch this garbage are no where near the top 1%.

Talking points that will repeat often.