Respectfully submitted by Lawrence Rafferty (rafflaw)- Guest Blogger
We have heard for years now that the wealthy and corporations need their tax cuts because without them jobs will not be created and the economy could fall back into recession. I guess I first heard of this concept during the Reagan years with the so-called “trickle down” economics. The claim that economic benefits and improvements trickle down from the very wealthy to the middle class and the poor was one that helped ride Reagan into office and continues to be claimed by some as the way out of recession. Indeed, the Republicans, since the George W. Bush administration have been insistent that the tax cuts for the wealthy are the key to promote increased employment for the country.
It is time that we look deeper into the claim that lowering taxes for the wealthy and for corporations will actually increase employment and separate the truth from fiction. “Based on IRS figures, the richest 1% nearly tripled its share of America’s after-tax income from 1980 to 2006. That’s an extra trillion dollars a year. Then, in the first year after the 2008 recession, they took 93% of all the new income. Wealth is even more skewed. The richest 10% own 83% of financial wealth, which they’ve skillfully arranged to be taxed at just 15%, ostensibly because they pump that money back into job-creating ventures.” Common Dreams
If I read those numbers correctly, the richest 1% continued to increase their wealth during the first year after the start of the recession while the middle class and the poor took significant hits in employment and income. Basically, if the Right’s call to continue the Bush tax cuts and to cut corporate taxation in order to increase employment and wealth for all is to believed, would we not have already fully recovered from the recession since the tax cuts have been continued to this date and the effective corporate taxes are far below the actual corporate tax rate? Just what did the Bush tax cuts do for President Bush’s record in creating jobs?
“The current President Bush, once taking account how long he’s been in office, shows the worst track record for job creation since the government began keeping records.” Wall Street Journal The Wall Street Journal wrote those words just as President Bush was leaving office and they compared all prior President’s records at job creation during their terms. It surprised me that even the much maligned Jimmy Carter administration had a far better record in job creation than President Bush, according to that same Wall Street Journal article. With that recent record of poor job creation, why would anyone believe that reducing taxes on the wealthy would create a bonanza of new jobs?
We have also heard repeatedly that the economy won’t grow jobs because corporations are taxed too much. This refrain is one that baffles me. Especially since I and others have written in the past of the many large United States companies that have paid little or no effective Federal taxes in recent years.
“Many corporate leaders have noted that other OECD countries have lowered their corporate tax rates in recent years, but fail to mention that these countries have also closed corporate tax loopholes while the U.S. has expanded them. As a result, the U.S. collects less corporate taxes as a share of GDP than all but one of the 26 OECD countries for which data are available.” Citizens for Tax Justice
These same corporations make Billions and pay a lower effective tax rate than the poor of this country. “Corporations even pay less than low-wage American workers. On their 2011 profits of $1.97 trillion, corporations paid $181 billion in federal income taxes (9%) and $40 billion in state income taxes (2%), for a total income tax burden of 11%. The poorest 20% of American citizens pay 17.4% in federal, state, and local taxes.” Common Dreams
The numbers tell us that it is not the wealthy and big corporations that create jobs, but the middle class. According to that same Common Dreams article linked above, “A recent study found that less than 1 percent of all entrepreneurs came from very rich or very poor backgrounds. They come from the middle class. That deserves repeating. Entrepreneurs come from the middle class. Not surprisingly, then, since the middle class has been depleted by the steady accumulation of wealth at the top, the number of entrepreneurs per capita has decreased 53% since 1977, and the number of self-employed Americans has decreased 20% since 1991.”
If the numbers tells us that jobs are not being created when the tax cuts for the wealthy and for large corporations are continued or even increased as has been suggested by the Right, then why should we believe those calls for continued lower taxes on the wealthy? What do you think is the truth and what ideas do you have to increase employment? And before I forget, Go Bears!
Additional Sources: The Taxonomist
Dredd,
Thank you, The pandering to power statement is the environment that justifies all the leaking wealth out of the US. The banks make more profit removing wealth out of the middle class.
They are tinkling on us, and telling us it is raining. The politicians are supporting the banks. Media are supporting the banks. Anyone (most) in the 0.1% are supporting the banks.
The american public sleeps the sleep of sheep, while the shepherd and his dogs make deals with the wolves.
Otteray Scribe:
Yes, I am sure you do but within the questions are the designer’s world view. Which was formulated based on their education and experience, this cannot help but seep out in the test questions no matter how objective they think they are being.
I will guess the developers of that test are predominantly anti-capitalist based on their economic questions. You will have to take my word that I have not looked into the political leanings of the test makers.
Quote from the video just above:
@OS: I scored:
Economic: -6.62
Social Libertarian: -5.90.
I actually think infrastructure, writ large, is THE best way for the government to stimulate the economy when that is needed. Not just roads and bridges, but electrical grids, communications grids, university and school building, water works and energy projects, docks and ports, river works, levees, railways, public transportation options, public libraries (digital or physical), public gyms and fitness centers, I would be for all of that stuff, even publicly subsidized schools for trades, like medical tech, mechanic, tax preparation and accounting, etc. I think if somebody wants to learn to MIG weld or operate a brake press, whatever taxes we pay to support that choice will be paid back tenfold by their higher taxes from a skilled income.
I would be for all of that.
Bron, I would wager the price of a steak dinner that I know a lot more about what goes into test design than you do. It is not like a couple of people get in an office and say, “Hey, this is a good question, let’s include it.”
Good test design is about as subjective as building a race car engine. I am not going to get into the details, but if you ever read a test manual, you would see just how carefully each item is vetted. The original MMPI came out in 1942. The original MMPI handbook was two volumes of about six hundred pages each. Extremely dense analytical reading.
Reblogged this on BLOGS BY BOB.
Otteray Scribe:
Asking if a person like Westerns is different than asking:
“A significant advantage of a one-party state is that it avoids all the arguments that delay progress in a democratic political system.”
That is a true statement. I agree with it in terms of functionality but disagree with it on a philosophical basis. But to disagree is to accept the validity of a one party system, I reject the idea of a one party system. And to agree with that statement is even worse.
On the MMPI, I remember a question:
“Would you rather be a taxi driver or a cop”.
What if you dont want to be either? What if you want to be a baker or a Marine?
These types of tests are very subjective and involve the test makers preconceived notions.
Thanks to all who were curious enough to take the little test. Bron, the questions were not poorly written. They were actually vetted very carefully for both reliability and validity.
Reliability means whether the test is repeatable, and statistical validity means a test question is actually measuring what you want it to measure. Sometimes a valid question does not look anything like what you would think it measures. In an earlier version of a famous vocational interest test, there was a question about whether you like western movies. Seems that research showed people who made good salespeople tended to like western movies. One question does not make a test….a good test designer is looking for trends.
taser_this:
“Eight members of the Walton family have the equivalent wealth as the bottom 90 – 100 million Americans. The bottom 50% of Americans have approximately 1% of the wealth.”
so you are saying the bottom 100 million Americans dont have a net worth of more than $255.00 each?
By the way the work force is only around 49.3% of the population which is about 153 million people. Average income is about $21,000, median income is around $45,000.
Wow….. And to think tax breaks create jobs….. I always thought it was demand…..if no money then little ability to buy…. Decreasing need for making the item not demand…… The car industry of the 70/80s in the US proves just because you have the product somebody may have made it better and newer…..
I was amazed to hear that more jobs are actually created under democrats which fact check proved it do…… Hmmmmm
http://www.nytimes.com/2012/09/10/opinion/krugman-obstruct-and-exploit.html?_r=1&ref=opinion Back from Austin, Blouise.
Here is my score:
Economic Left/Right: 7.25
Social Libertarian/Authoritarian: -4.15
“A genuine free market requires restrictions on the ability of predator multinationals to create monopolies.”
How do you answer a question like that? A free market would prevent a predatory monopoly.
“A significant advantage of a one-party state is that it avoids all the arguments that delay progress in a democratic political system.”
What kind of question is this? The appropriate answer is a one party state shouldnt even exist. How can you agree or disagree to evil?
there were some other questions that were pretty poorly written as well.
That is what I dont get about the left, you guys score well on the social libertarian side but terribly on the economic side. I think that is a contradiction.
Will some one please explain to me why intervention in the bedroom is bad while intervention in the wallet is acceptable or even morally good for some?
One video at my link above:
Rafflaw asks: “What do you think is the truth and what ideas do you have to increase employment?”
So many good comments have been made on a good post.
One thing I would add is that we pay close attention to the nature of our plutonomy (no more a middle class economy), as described by memos that have now become rogue:
(The Homeland: Big Brother Plutonomy). If you have not read “The Plutonomy Memos” put out by CitiGroup to its investors, you need to go to my link and download them.
It details the essential structure of the U.S.eh? as a plutocracy running a plutonomy, not a middle-class driven economy any longer.
These memos were brutally suppressed by a mega law firm, and “recalled” because the 1% do not want the heat:
(use link above). Things are getting curiouser and curiouser when the structure is not contemplated when proposing fixes because the structure is being forcefully hidden from us.
Eight members of the Walton family have the equivalent wealth as the bottom 90 – 100 million Americans. The bottom 50% of Americans have approximately 1% of the wealth.
Economic Left/Right: -6.38
Social Libertarian/Authoritarian: -6.33
The US Government does not bring in tax revenues and hide them under a mattress. Every dime the Gov brings in… goes out into our economy, (doesn’t it ?) This is what I don’t understand.
Government salaries, contracts, grants. etc.
Does the gov spend most of its tax revenue within our borders?
I know tax breaks reduce gov revenue. Help! if the gov increased revenue wouldn’t it then increase spending? Where does our tax revenue go, if it does not go back into our economy in some form?
My limited knowledge of Wall st and Banks allows me to think they get a LOT of it, and then it POOFS “disappears” somewhere never to be seen in our economy again.
When money is spent in our economy it is available for profit and reinvestment. Round and round it goes. I think there is a leak that allows money to escape out of our country, and there is a clog that stops money flowing into our economy.
” Necessary income for today, comes from resources and focused labor.
Wealth is an accumulation of things, not necessary today.
Great wealth accumulates things, not necessary at all.
Except for even greater accumulation, to no purpose at all.
That drains the pool of Wealth, necessary for the incomes of today” DB.