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
Bron, I’m very free market but hate the way corporations are run[for the most part] and they’re cancerous influence on politics. I deplore corporate welfare.
Bron, good question, but it seems legit when you consider it’s a graph and the left is just in the negative sector.
Dred,
Thanks for the informative videos.
Swarthmore,
I saw the Krugman article this morning. Thanks for linking to it.
NICK:
with your scores you are sort of in the middle on the economics but not on the social.
I was actually surprised by your economics score, I would have thought it would have been much more toward the plus.
Which brings up another question:
Why do they consider liberal to be negative scores?
TonyC, Inflation hits EVERYONE and hits those who can’t work and on fixed incomes the worst.
Here are more:
Because corporations cannot be trusted to voluntarily protect the environment, they require regulation.
Well, that isn’t the ONLY reason they require regulation, is it?
Controlling inflation is more important than controlling unemployment.
Is it impossible to control both? Who says these are mutually exclusive choices? (They are not, not at all, we can alleviate unemployment without printing money to do it; just raise corporate taxes on profits.)
The freer the market, the freer the people.
Okay, we have a spectrum question, but it depends on the MARKET, doesn’t it? If we are talking about the market for music, then sure. If we are talking about the market for medical care, then hell no.
Nobody dies from bad music or a lack of music. Nobody has to give up their life’s savings to get some emergency music. There are no music ambulances with a flute soloist in the back while you are rushed to a symphony.
Blouise, I chuckled @ your last comment. Very conservative people would have your same take on “the obvious answer”. The only difference being they would Strongly disagree on the same answer you Strongly agree. When you’re an independent like myself it’s a different world looking @ people @ both ends of the spectrum. Not a slam, just an observation.
Tony,
“There is now a worrying fusion of information and entertainment.”
Good points that you make, especially about the amount of disinformation being presented under the guise of news which is really about entertainment (Limbaugh, et al). I used to watch the early morning show with Hughs Rudd for the news. Was disappointed with his apparent misogyny later on, but maybe he was really upset about the flavor change from his sorta grumpy presentation to the softer presentation of a woman.
Now the early morning shows are all about entertainment, any real news is coincidental, superficial and probably false. The Sunday Morning Shows pretend to be news show, but they’re really platforms for spin.
Where is the hard news?
The best news is from Stewart and Colbert who do a great job in outing the lies. Yes, it’s satirical entertainment but they don’t pretend to anything else. Rachel Maddow does a good job of going in depth, outing lies, but I get put off by her bias.
I agree with the statement.
Blouise, You are correct. I am an uber introvert and the way I control my enviroment is solitude.
Tony C.,
“My problem with the test is questions like …”
I had to smile at some of the questions as they were so obviously written to illicit a specific answer. That being said, I found it entertaining. So Cosmo, if you will. 😉
nick spinelli,
I suspect you have a stronger urge to control your environment whereas I thrive in chaos.
My problem with the test is questions like, “There is now a worrying fusion of information and entertainment.”
Read literally, I am not worried by information being entertaining; the Daily Show and Colbert Report manage to ridicule and find the humor in hypocrisy without lying about any of it. To me, the worrying fusion is MISinformation and entertainment, like Rush Limbaugh and FOX “news” and even MSNBC.
When people talk about this fusion of news and entertainment, that is what they are talking about, the idea that lies are fine if you call it entertainment. At least that is what I think, they aren’t talking about Jon Stewart showing actual clips of politicians lying to us. Virtually nobody but the liars are worried about the truth, the worrying fusion is the media abandoning the truth and excusing their lies as entertaining fictions.
So what does the question cover? It’s literal meaning, which I would strongly disagree with because I love the Daily Show, or the now common phenomenon of strongly ideological media outlets purposely presenting false information, implications, and innuendo as if it were serious fact, and calling that “entertainment?” Because I agree that the latter IS a worrying fusion.
Blouise, I look upon my moderation more wisdom than lack of energy. Don’t sell yourself short, I see some wisdom in your liberal soul.
“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.
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“Free Market” is a euphemism for the treaties that place corporations above the laws and constitutions of the participating countries. I prefer “Fair Trade” which introduces the idea of fair treatment of all parties, including workers and the environment.
Reblogged this on Skeptic Griggsy.
“As I took the test I realized where many of you folks would STRONGLY agree or disagree I would simply agree or disagree.” (nick spinelli)
I’m not sure I would agree with your observation as I only answered one question with strongly disagree and one question with strongly agree.
“Having seen and done much, I’ve become more even keel.” (nick spinelli)
Most who take the time to post regularly on this blog aren’t “spring chickens” and have, more than likely, moderated the enthusiasm of their youth if for no other reasons than the level of energy required and the wisdom of surviving years in the trenches.
One such example … “Portable Cordless Vacuums
For the Apollo space mission, NASA required a portable, self-contained drill capable of extracting core samples from below the lunar surface.
Black & Decker was tasked with the job, and developed a computer program to optimize the design of the drill’s motor and ensure minimal power consumption. That computer program led to the development of a cordless miniature vacuum cleaner called the Dustbuster.
How about Fire-Resistant Reinforcement
Built and designed by Avco Corporation, the Apollo heat shield was coated with a material whose purpose was to burn and thus dissipate energy during reentry while charring, to form a protective coating to block heat penetration.
NASA subsequently funded Avco’s development of other applications of the heat shield, such as fire-retardant paints and foams for aircraft.
Further innovations include steel coatings devised to make high-rise buildings and public structures safer by swelling to provide a tough and stable insulating layer over the steel for up to four hours of fire protection, slowing building collapse and providing more time for escape.”
Here’s an easy to read site that list just a few of the products. Keep in mind that other products such as Compact Disc (CD’S) were helped along in their development by funding from the USA Space and Military and thus brought to market sooner than would have otherwise been the case.
http://www.cnbc.com/id/32085995/Top_Commercial_Products_Launched_by_NASA?slide=1
Economic -1.25
L/A -4.56
As I took the test I realized where many of you folks would STRONGLY agree or disagree I would simply agree or disagree. Early in my life I had a lot of Strongly in me. Having seen and done much, I’ve become more even keel. I’ve not been here as long as you good people. However, none of your scores really surprised me and probably vice versa.
Bron,
“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.
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I guess it depends on what you consider progress.
Consider the quote you provided: “When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.” -Frédéric Bastiat
To extrapolate from that quote: How long would it take for one-party to create for themselves a legal system that authorizes whatever they want and a moral code that glorifies. Whether or not it’s progress would depend on whether or not you happen to agree with that approach. What do you do if you don’t like their idea of “progress”?
Bron, your theory is why we have statistics and statistical analysis. Any test designer starts with the null hypothesis. Deviations from the null are supposed to tease out some sort of valid response set. As for questions of the type you posited above, whether one would want to be a cab driver or a police officer, those are called “forced choice” questions. Whether you would like to be both, or neither is immaterial. You have to come down on the side that is either most desirable or less onerous. Think 51 to 49 percent. That is how it works.
As as I said, what you THINK the test question is measuring, is probably not. At least in a test designed to be non-transparent to the test taker.
@Bron: You never fail to miss the point, do you?
The entrepreneurs had something to work with, circa 1980, because of 35 years of government-backed research and development that no private company would ever have contemplated, because it was not goal oriented, any patents would have expired before being exploited, original investors and CEOs would be dead before profits were realized, and on and on.
There was no plan; the government was willing to pay millions for the slight battle field advantage a computer with the power of a wristwatch calculator could provide; no company was willing to do that. It is why IBM once estimated the worldwide demand for computers was less than a hundred: Probably true, if they cost twenty million and provide the approximate power of a TI programmable hand held calculator.
The point was that what the entrepreneurs had to work with and improve was not something they could have built themselves. Even in its primitive state, it was the product of 35 years and billions of dollars worth of undirected research by many thousands of academic and private firms, solving problems for the military and investigating phenomena and algorithms without a profit motive. All of that ended up in the public domain, and coalesced in the 70’s into something entrepreneurs could exploit, improve, and earn profits from. No amount of competition for profit would have provided the billions it took to build the base.
The point is NOT for the government to KEEP the research, the point is that the government can provide the public with long term research and knowledge that no for-profit company could afford to build; it takes too long, it costs too much, and the profit time line is generational. Market forces are inherently short-sighted, corporations typically spend zero percent of their revenue on undirected research, especially if it is unlikely to lead to anything immediately profitable.
The government can fill that gap.