Tag Archives: Tax Cuts

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.

Videos

Megyn Kelly and Michele Bachmann on the Bush tax cut deal

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I found this on Michele’s Facebook page.

There is a strange gap in the video for a couple of seconds near the beginning. But who cares? It’s Michele Bachmann! You better watch it!!!

A sober assessment of the pros and cons. Should the Republicans have cut this deal?

Commentary

Did Obama keep his promise to not raise taxes on the middle class?

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The non-partisan libertarian Cato Institute explains that Obama broke his promise not to raise taxes on the middle class.

Excerpt:

How many times have you heard the president and the congressional Democrats say Americans who make less than $200,000 a year have not had, and will not have, any of their taxes increased? Unfortunately, it is not true, and it is likely to become a whole lot worse.

The 111th Congress has already enacted $352 billion in net tax increases and may, in the upcoming lame-duck session, enact the largest tax increases in history, which will hit every man, woman and child — as well as every business in America. The good folks at Americans for Tax Reform (ATR) have put together the data on what the current Democrat-controlled Congress has done already. I have summarized their analysis in the accompanying table.

Here is table:

Net Change in Taxes
111th Congress
(in billions of dollars)
Legislation
(bill number)		 Gross Tax Cuts Enacted Gross Tax Increases Enacted
H.R. 2 S-Chip 0 65.5
H.R. 1 “Stimulus” 217.6 0
H.R. 3590/4872 “Obamacare” 144.0 652.2
H.R. 5297 “Small Business” 12.0 8.0
Totals 373.0 725.7

He continues:

The tax increase of $725.7 billion dwarfs the tax cuts of $373 billion, leaving a net tax increase of $352 billion. But it gets worse. Just $107.6 billion of the tax cuts are permanent — the rest are temporary — but all of the $725.7 billion increases are permanent.

The S-Chip bill was funded by an additional $65.5 billion in tobacco tax increases. These increases are paid primarily by lower-income people. Obamacare is funded with a variety of individual and employer mandates, excise tax increases and fees, including a tax on “tanning salons,” adding up to $652 billion in tax increases, before deducting $107 billion in “exchange credits” and $37 billion in small-business tax credits. The vast majority of these tax increases fall on middle- and lower-income people. As with all of the revenue estimates prepared by Congress’ Joint Tax Committee, most of the behavioral effects of these tax changes are ignored — e.g., how many tanning-salon customers will now opt for the sun rather than pay the tax?

The president and most congressional Democrats have been claiming they will make sure no one making less than $200,000 per year will face a tax increase when all of the “Bush tax cuts” expire on midnight Dec. 31. Given they have not been truthful about the tax increases they already have enacted, why should anyone believe these new claims?

Democrats don’t cut taxes, they raise them. Democrats don’t reduce spending, they increase it. Democrats don’t enable businesses to create more jobs, they attack businesses and we get fewer jobs. Those are the facts.