Tag Archives: Tax Cuts for the Rich

Commentary

Do “tax cuts for the rich” have a track record of creating jobs?

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Can complaining about “the rich” create more jobs than passing across-the-board tax cuts?

Let’s see what the record shows.

Excerpt:

Why do we seem so helpless in solving our current mess? A big reason is the shocking lack of basic economic literacy among many of our political leaders. Case in point: Ohio Democratic Sen. Sherrod Brown.

Brown ripped into GOP Rep. Eric Cantor, saying he “either failed English class or failed logic class or failed history class because these tax cuts for the rich that Bush did twice … resulted in very little economic growth. We saw only 1 million jobs created in the Bush years, 22 million created in the Clinton years, when we reached a balanced budget with a fairer tax system.”

This is false. From 2002, the last year before the cuts, to 2007, the last year before the financial meltdown, the real economy expanded by $1.77 trillion, or 15.2%. “Very little” growth? Jobs increased by 7.77 million, business investment surged 38%, and personal net worth soared 56%. Brown is wrong on every point.

Yes, gross domestic product did fall sharply in 2008 as the financial meltdown hit. But no reputable economist maintains the financial panic was a result of the Bush tax cuts.

No, the declines in the economy are to be blamed on Nancy Pelosi and Harry Reid, who were running the House and Senate starting in January 2007. It was their ballgame from that point on.

More:

Laughably, Brown talks about how “we” reached a balanced budget during the Clinton years. What do you mean “we,” senator? Since budgets are written and passed by Congress, and only approved by the president, Brown must know that it was Republicans who balanced the budget — not Democrats.

That’s right, a GOP-led Congress controlled the spending that led to the surpluses of the late 1990s. It also proposed welfare reform and pushed through cap-gains tax cuts that helped the economy boom. To his credit, President Clinton signed these initiatives into law — but only after much political arm-twisting.

[…]He went on to say: “There is no real history illustrating that these tax cuts for the rich result in jobs. It’s extending unemployment benefits that creates economic activity that creates jobs, not giving a millionaire an extra … $30,000 in tax cuts they likely won’t spend.”

“No real history”? Taxes were cut on high-income earners in the 1920s (Coolidge), 1960s (Kennedy), 1980s (Reagan) and again in the 2000s (Bush). These cuts benefited the rich and everyone else. In all these cases, jobs boomed after tax cuts. In fact, history shows that the best way to boost jobs is to cut taxes on the rich.

Democrats don’t know how to create jobs. They think that taxing and regulating businesses causes businesses to create jobs. It’s like if government walked up to a runner at the start line, stole his sneakers (taxes) and put a backpack full of dirt (regulations) on his back, and then told him to run faster. Having less money after taxes = fewer jobs. Spending more time complying with regulation = less time for running your business = fewer jobs. The Democrat policies make no sense, except to people with limited real life experience working in the private sector or running a business of their own.

News

Richest hedge fund managers gave 98% of contributions to Democrats

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Story here on Big Government. (H/T ECM)

Excerpt:

The world’s top-earning hedge fund managers have bankrolled almost exclusively Democratic campaigns.

The top 10 highest-paid hedge fund managers in 2009 have dished out campaign contributions almost only to Democrats.

Over their lifetimes, those managers have given almost $33 million in campaign contributions to Democrats, according to research by the National Republican Congressional Committee (NRCC) and that is based on data maintained by the nonpartisan CQMoneyline.

The same managers gave roughly $600,000 to Republicans, according to the research. The contributions went 98 percent to Democrats and two percent to Republicans.

But there’s more:

As the Senate prepares to debate possibly hundreds of amendments to a Wall Street overhaul bill, labor unions and others have criticized the bill for not having tough restrictions on hedge funds.

“It’s very disconcerting to see this legislation moving forward that gives them a complete pass,” said Heather Slavkin, of AFL-CIO.

I wonder if the two facts are connected in some way? Maybe.

Related posts

    News

    MUST-READ: Wall Street bankers gave Obama millions in campaign contributions

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    Republican House Minority Leader John Boehner reports on Obama’s new bank bailout bill.

    Excerpt:

    President Obama likes to say we need to clean up Wall Street.  But let’s be clear: He is pushing a job-killing bailout bill for Wall Street that benefits his top financial contributor from the 2008 campaign – a firm that just happens to be under investigation by the SEC for defrauding investors.

    Despite the President’s rhetoric, his support for the Democrats’ bailout bills gives big Wall Street banks a permanent, taxpayer-funded safety net by designating them “too big to fail.”

    […]Goldman Sachs, recently charged with defrauding investors, was President Obama’s top Wall Street contributor during the 2008 election cycle, donating nearly $1 million to his campaign.

    • Securities & investment firms in general were the fifth largest contributor to President Obama’s 2008 campaign, donating nearly $15 million.
    • Big banks also donated more than $3 million to Obama during the 2008 election cycle.

    And some details about what the new bank bailout does:

    • The Dodd Gives Wall Street a Pre-Existing $50 Billion Bailout Slush Fund. Sen. Dodd’s financial bailout bill would create a $50 billion ‘orderly resolution fund’ ($150 billion in Rep. Barney Frank’s bill) that could be repeatedly replenished from industry assessment.
    • The Dodd Bill Gives Wall Street a Treasury-Backed Credit Line.  The FDIC would be authorized to borrow from Treasury up to the amount of cash left in the ‘resolution fund’ plus 90 percent of the value of the assets of any and all too-big-to-fail firms in its control.
    • The Dodd Bill Provides a Government-Guaranteed to Wall Street Debt.  The FDIC would be authorized to guarantee the debt of any solvent bank, bank holding company, or affiliate in any amount subject only to an aggregate debt limit set by the Treasury Department.
    • The Dodd Bill Institutionalizes Unlimited Wall Street Bailouts.  The FDIC, as the resolution agency for too-big-to-fail firms, would be given wide latitude to use resources to make payments to anyone in any amounts, at their own discretion.

    Now let’s hear more about the rich bankers from Goldman Sachs.

    Goldman Sachs

    This Newsbusters article explains Goldman Sachs’ connections to the White House:

    • White House Chief of Staff Rahm Emanuel used to work for Goldman Sachs.
    • Treasury Secretary Tim Geithner used to work for Goldman Sachs.

    And the Washington Examiner reports that:

    • Former White House counsel Greg Craig is now employed by Goldman Sachs.

    Wall Street banks like Goldman Sachs are often filled with Democrats.

    Fannie Mae and Freddie Mac

    And don’t forget that the government-backed companies Fannie Mae and Freddie Mac were run by Democrats, and they were also bailed out by the Democrats.

    Excerpt:

    Freddie and Fannie used huge lobbying budgets and political contributions to keep regulators off their backs.

    A group called the Center for Responsive Politics keeps track of which politicians get Fannie and Freddie political contributions. The top three U.S. senators getting big Fannie and Freddie political bucks were Democrats and No. 2 is Sen. Barack Obama.

    Now remember, he’s only been in the Senate four years, but he still managed to grab the No. 2 spot ahead of John Kerry — decades in the Senate — and Chris Dodd, who is chairman of the Senate Banking Committee.

    Fannie and Freddie have been creations of the congressional Democrats and the Clinton White House, designed to make mortgages available to more people and, as it turns out, some people who couldn’t afford them.

    Fannie and Freddie have also been places for big Washington Democrats to go to work in the semi-private sector and pocket millions. The Clinton administration’s White House Budget Director Franklin Raines ran Fannie and collected $50 million. Jamie Gorelick — Clinton Justice Department official — worked for Fannie and took home $26 million. Big Democrat Jim Johnson, recently on Obama’s VP search committee, has hauled in millions from his Fannie Mae CEO job.

    Political contributions and bailouts. Is there a connection?