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August 19, 2014

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BREAKING: New Coal Disaster In West Virginia -

Tuesday, February 11, 2014

U.S. Hostage Freed by Colombia’s FARC Rebels (Video) -

Monday, October 28, 2013

Here’s Why The Zimmerman Verdict Matters -

Sunday, July 14, 2013

BREAKING! UK Government Spied On Allies At TWO G20 Summits (Video) -

Sunday, June 16, 2013

Swiss Support Tougher Asylum Legislation as Refugee Numbers Spike -

Monday, June 10, 2013

American Woman Killed in Syria Fighting for Terrorists, Syrian TV Claims (Video) -

Friday, May 31, 2013

CO2 in the Air Reached its Highest Level in Human History -

Friday, May 10, 2013

Terms of the New Abortion Bill Agreed by Irish Cabinet -

Wednesday, May 1, 2013

Boston In Lockdown As Manhunt Intensifies -

Friday, April 19, 2013

2 Dead, Dozens Injured After Boston Marathon Bombing -

Monday, April 15, 2013

Fast Food Workers in New York Stage Surprise Strike -

Saturday, April 6, 2013

N. Korean Rhetoric Provokes Missile Shield Deployment -

Wednesday, April 3, 2013

Eyewitness Accounts from Meiktila Massacre -

Wednesday, April 3, 2013

Sudan to Free All Political Prisoners -

Monday, April 1, 2013

A New Free Press In Burma Juxtaposed With Genocide: The World Will Be Watching -

Friday, March 29, 2013

Pressure Builds to End Ethnic Violence in Myanmar -

Friday, March 29, 2013

Activists Demand Action As Further Genocide Looms -

Tuesday, March 26, 2013

Cyprus Reaches Last-Minute Bailout Deal With EU -

Monday, March 25, 2013

Myanmar Muslims Brace for Possible Genocide -

Sunday, March 24, 2013

IMF Chief Lagarde’s Home Searched over Tapie Scandal -

Wednesday, March 20, 2013

Myth: “Tax Cuts For The Rich Create Jobs.”


Myth: “Wealthy people are job creators. When you give tax cuts to the wealthy, it creates jobs. When you raise their taxes, it destroys jobs.”

When we look at the US economic history, overall economic growth has been stronger during periods of higher tax rates.

After Ronald Reagan cut taxes 25% in 1981, unemployment continued to rise for another year and a half and the budget deficit tripled. Two years after the Reagan tax cuts, unemployment was still higher than when he took office.

Bill Clinton raised taxes on the wealthiest 1% of Americans (called the biggest tax increase in history at the time) and invested in our economy. Republicans predicted a new recession and said it would tank the economy. Over the next 7 years everyone prospered. The stock market tripled in value. There were 22 million new jobs created, the federal budget deficit was wiped out and we actually had a surplus which was growing so fast it was projected to pay off our national debt within 20 years. The Census Bureau said the percentage of Americans living in poverty fell every year during the Clinton years – from 13.6% to 9.6%.

On the other hand, George W. Bush cut taxes, mostly for the wealthy. This wiped out the budget surplus and created a massive deficit that reached $1 trillion dollars before he left office. Over the next 7 years we had two recessions, increasing poverty rates, and a net gain of only 3 million jobs.

The data collected from the Bureau of Labor Statistics and Tax Policy Center indicates that “Altogether, in years when the top marginal rate was lower than 39.6 percent—the top rate during the 1990s—annual real growth averaged 2.1 percent. In years when the rate was 39.6 percent or higher, real growth averaged 3.8 percent. The pattern is the same regardless of threshold. Take 50 percent, for example. Growth in years when the tax rate was less than 50 percent averaged 2.7 percent. In years with tax rates at or more than 50 percent, growth was 3.7 percent.

These numbers do not mean that higher rates necessarily lead to higher growth. But the central tenet of modern conservative economics is that a lower top marginal tax rate will result in more growth, and these numbers do show conclusively that history has not been kind to that theory.”

“Economic growth” or “economic growth theory” typically refers to growth of potential output, i.e., production at “full employment“.

Image Credit: Center For American Progress


Jeff (30 Posts)