Republicans Myths Exposed - Higher Income Taxes on The Wealthy Hurt Job Creation

Republicans Myths Exposed - Higher Income Taxes on The Wealthy Hurt Job Creation. Not True!

Last week we pointed out that even though conservatives seem obsessed with the top income tax rate, overall economic growth was actually stronger during periods of higher tax rates. But maybe we missed the point. Maybe what conservatives are really concerned about is job growth, not overall economic growth. Maybe they have some convoluted argument about how the tax rate for rich people is incredibly important for creating jobs.

Cue the quotes:

Speaker John Boehner (R-OH): “What some are suggesting is that we take this money from people who would invest in our economy and create jobs and give it to the government. The fact is you can't tax the very people that we expect to invest in the economy and create jobs.”

Former Massachusetts Gov. Mitt Romney: “With over 20 million people who are unemployed or who have stopped looking for work, the last thing we should be doing is raising taxes on job-creators, entrepreneurs, and small business owners across America.”

John Boehner, again: “A tax hike would wreak havoc not only on our economy’s ability to create private-sector jobs, but also on our ability to tackle the national debt.”

Apparently, conservatives believe that a key driver of overall job growth is the tax rate that rich people pay on their last dollar of income. They argue that these very rich people are the ones who “create” the jobs and therefore taxing them at even slightly higher rates will make them less likely to invest, expand their businesses, and hire more people. That sounds plausible, but it turns out to be completely baseless.

In fact, they are just as wrong about this as they are about the relationship between marginal tax rates and overall economic growth. In the past 60 years, job growth has actually been greater in years when the top income tax rate was much higher than it is now.

For instance, in years when the top marginal rate was more than 90 percent, the average annual growth in total payroll employment was 2 percent. In years when the top marginal rate was 35 percent or less—which it is now—employment grew by an average of just 0.4 percent.

And there’s no cherry-picking here. Pick any threshold. When the marginal tax rate was 50 percent or above, annual employment growth averaged 2.3 percent, and when the rate was under 50, growth was half that.

In fact, if you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher. The top 10 years would share marginal tax rates at 50 percent or higher. The two worst years, on the other hand, were 2008 and 2009, when the top marginal tax rate was 35 percent. In the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation.

We showed last week that lower rates are not associated with faster overall economic growth—just the opposite, in fact. And now we know that lower rates don’t coincide with higher job growth, either. So where is the evidence that the lower marginal tax rates spur job creation? It’s certainly not present in the past 60 years of American history.

It’s worth keeping this in mind the next time a conservative lawmaker claims that raising the rates for the wealthy would “destroy jobs.”

No one likes taxes, but they are the cost we pay for a modern industrialized society. Businesses and individuals all use what taxes pay for - roads, bridges, the military, fire trucks, educating the work force that employers hire, street lights, science research, student loans to medical students, health care for poor grandmas. Conservatives say they are responsible citizens, but the fact they do not want to pay for the services that make a free market economy possible, makes them irresponsible jerks.

If The U.S. is Really a Free Market Economy How Come Only The Rich Get Richer

Income Gaps Between Very Rich and Everyone Else More Than Tripled In Last Three Decades, New Data Show

The gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007 (the period for which these data are available), according to data the Congressional Budget Office (CBO) issued last week. Taken together with prior research, the new data suggest greater income concentration at the top of the income scale than at any time since 1928.

While the recession that began in December 2007 likely reduced the income of the wealthiest Americans substantially and may thereby shrink the income gap between rich and poor households, a similar development that occurred around the bursting of the dot.com bubble and the 2001 recession turned out to be just a speed bump. Incomes at the top more than made up the lost ground from 2003 to 2005.

The new CBO data — the most comprehensive data available on changes in incomes and taxes for different income groups — also show the following:

    In 2007, the share of after-tax income going to the top 1 percent hit its highest level (17.1 percent) since 1979, while the share going to the middle one-fifth of Americans shrank to its lowest level during this period (14.1 percent).
    Between 1979 and 2007, average after-tax incomes for the top 1 percent rose by 281 percent after adjusting for inflation — an increase in income of $973,100 per household — compared to increases of 25 percent ($11,200 per household) for the middle fifth of households and 16 percent ($2,400 per household) for the bottom fifth (see Figure 1).
    If all groups’ after-tax incomes had grown at the same percentage rate over the 1979-2007 period, middle-income households would have received an additional $13,042 in 2007 and families in the bottom fifth would have received an additional $6,010.
    In 2007, the average household in the top 1 percent had an income of $1.3 million, up $88,800 just from the prior year; this $88,800 gain is well above the total 2007 income of the average middle-income household ($55,300). [1]

Income Gains at Top Have Outpaced All Other Groups Since 1979

The gap in income between the wealthiest Americans and all others has grown strikingly in recent decades, the CBO data show. In 1979, when the data begin, the average after-tax incomes of the top 1 percent of households were 7.9 times higher than those of the middle fifth of households. By 2007, top incomes were 23.9 times higher than those of the middle fifth — a more than tripling of the income gap.

The gap between the top 1 percent and the poorest fifth of Americans widened even more sharply. In 1979, the incomes of the top 1 percent were 22.7 times higher than those of the bottom fifth. By 2007, top incomes were 74.6 times higher than those at the bottom — more than tripling the rich-poor gap in 28 years --

The CBO figures show that the nation’s income has grown substantially since 1979; if this growth had been shared more broadly, most groups would have seen much larger gains. For the nation as a whole, after-tax household income increased 55 percent from 1979 to 2007, adjusted for inflation. If all groups’ incomes had grown by 55 percent, the average income of the bottom fifth of households would have been $23,710 in 2007 (rather than $17,700) and the average income of the middle fifth would have been $68,342 (rather than $55,300).

Instead, the wealthiest households reaped a sharply growing share of the nation’s income, while the share going to middle- and lower-income households shrank  ..

Pre-Tax Income Inequality Also Growing Rapidly

The bulk of the increase in after-tax income inequality since 1979 reflects changes in pre-tax incomes. The incomes of the top 1 percent rose 141 percent from 1979 to 2007 before taxes are considered, the CBO data show. The top 1 percent’s share of before-tax income (like its share of after-tax income) more than doubled from 1979 to 2007, from 9.3 percent to 19.4 percent.

By 2007, the top 1 percent had before-tax incomes that were 24 times higher than those of the middle fifth of Americans — a share that had nearly tripled since 1979.

The rapidly rising pre-tax incomes of the wealthy help to explain the notable rise in the percentage of total tax revenue collected from these households. CBO’s data show that the share of total federal taxes paid by the top 1 percent of households rose from 25.5 percent in 2000 to 28.1 percent in 2007, the second-highest share since 1979 (only 2006 was higher).

The increase in the share of taxes paid by the wealthy is often cited erroneously as evidence that their tax burden is rising. In reality, the effective federal tax rate for the top 1 percent of households — the percentage of their income that they pay in federal taxes — declined from 33.0 percent of income in 2000 to 29.5 percent in 2007.

The top 1 percent paid a growing share of total taxes chiefly because they received a growing share of total before-tax income: 19.4 percent in 2007, compared to 17.8 percent in 2000. Indeed, the effective tax rate of the top 1 percent of households was lower in 2007 than in any year since 1990, demonstrating beyond a doubt that their tax burdens were decreased, not increased.

Bush-Era Tax Cuts Have Exacerbated Income Gaps

Legislation enacted under the Bush Administration provided taxpayers with about $1.7 trillion in tax cuts through 2008. Because high-income households received by far the largest tax cuts — not only in dollar terms but also as a percentage of income — the tax cuts have increased the concentration of after-tax income at the top of the spectrum.

The CBO data do not provide a direct measure of the impact of these tax policy changes because they also reflect the effects of changes in household incomes and other factors that influence tax payments. However, estimates by the Urban Institute-Brookings Institution Tax Policy Center that consider only the impact of the tax policy changes demonstrate that the tax cuts have widened income inequality. 

It still pays to work in American, it beats starving to death. On the other hand does working and taking home a check mean you'll gradually improve your lot in life. The odds are against you. In contrast if you're wealthy doing not much pays off quite well. Sure people who seat behind a desk all day like hedge fund mangers and corporate CEOs will complain they work a 12 hour day. 12 hours behind a desk reading reports and e-mails, than going to a couple meetings a day is hardly comparable to putting out fires or roofing a house or providing nursing care to a few dozen patients.

And if Obama is such a big socialist than how come he has done nothing about the disparity between the pay of the rich versus the average citizen.

Michele Bachmann government tax collector.

The Fake Patriots of the Republican Party Have Jettisoned Reason in Favor of Wacky Beliefs

The Fake Patriots of the Republican Party Have Jettisoned Reason in Favor of Wacky Beliefs

In Huckleberry Finn, Mark Twain makes a stinging observation on the overtly religious. “Faith is when you believe something you know ain’t true.” This is a perfect description of the religious asylum that is now the Republican Party and the tortured gospel they are spreading all over the country. Virtually the entire barnyard of their presidential candidates are preaching a mix of born again religious revivalism and brutal 19th century industrial capitalism, that they “know ain’t even remotely true.”

By and large these are not genetically stupid people. But the political trash talking they feel obligated to serve up to the Tea Party Gods--Rush Limbaugh and the inquisitors at Fox--has degenerated into a competition of who can do the best impression of an absolute lunatic. Rick Perry is preaching virtual secession from the union, while holding prayer vigils for God to solve our problems. By what twisted logic does contempt for the federal government and even secession equate to patriotism? Someone please show me where the founding fathers advocated prayer as the vehicle for solving a national debt crisis?

Mitt Romney and Tim Pawlenty have flip flopped on virtually every position they ever espoused so that their insanity titers can match Michelle Bachmann's. I’ve met with Jon Huntsman on more than one occasion regarding environmental issues in Utah. He was a reasonable moderate Republican as my state’s governor and appeared on TV ads three years ago exhorting the entire country to act on the climate crisis. He did that because he respected the warnings of our climate scientists. Now he says we can't deal with global warming in a depressed economy. He knows perfectly well that those same scientists are warning that if we don’t act on it right now, we condemn our children to a brutal, dangerous and likely unlivable world. Newt Gingrich? He appeared on national TV ads with Nancy Pelosi saying that he agreed on the urgency to deal with the climate crisis. Now he looks like a Keystone Cop, tripping over his own feet in full speed reverse.

Sarah Palin? Oh, never mind. Rick Santorum? According to him the world’s scientists are all in on a conspiracy with Al Gore. Really Rick? That conspiracy would have to have started in 1824 when the greenhouse gas phenomenon was first described by the French scientist Joseph Fourier. It would have to have involved scores of scientists in the 1800s like John Tyndall of the Royal Institute of Great Britain, George Marsh, the founder of the Smithsonian Institute, and hundreds of scientists in the 1900s like 1903 Nobel Prize winner Svante Arrhenius. The conspiracy would now have to involve virtually the entire world’s scientific community. That makes sense to you, Rick? Really?

Almost as irritating is the chorus sung over and over by Eric Cantor, John Boehner, Mitch McConnell, Paul Ryan and 99% of Republican Congressmen proudly declaring their Huckleberry Finn type faith that an unfettered free market is the only way to create to millions of new jobs. “Stop choking businesses with excessive regulations!” they chant. All businesses, all regulations. Really, Mitch? Never mind that it was precisely the elimination of, inadequacy of, or lack of enforcement of federal regulation that allowed Wall St. to drag the economy to the edge of the apocalypse and the very reason why there are no jobs. Never mind that it was poor regulation and free market cost cutting that brought us the Deep Water Horizon, Kalamazoo River, and now Yellowstone River oil spills. 1,800 oil spills have occurred in this country in the last five years totaling 16 million gallons of oil contaminating our land and water. And Mitt, you want regulators to get off the backs of the oil companies? Really?

Never mind that it was inadequate federal oversight and greedy, unfettered capitalism on steroids that allowed Massey Energy to commit manslaughter on 29 coal miners last year. Hey, Eric just what jobs are created by paring down our already bare bones federal food inspection? Will even more outbreaks of e-coli and salmonella in peanut butter, spinach, eggs, cantaloupe, sprouts and hamburger be counted as just collateral blessings from unleashing the free market? We certainly don’t want to pay for inspection of imported sea food from Japan because a little radioactivity in your tuna fish and scallops would probably just make it taste a little more crunchy.

Hey Newt, what jobs will be created by eviscerating the EPA and their enforcement of the Clean Air Act besides morticians and health care providers? Michelle, so you’re comfortable with eliminating money for bridge inspectors from the National Transportation Safety Board because the one that collapsed in your home state in 2007 only killed 13 people, and that’s a small price to pay for that warm, orgasmic tingle only the free market can give?

Lets certainly get regulators off the backs of the pharmaceutical industry because other than the millions of people who have been killed or injured by Phen-Fen, Vioxx, Avandia, Bextra, Cylert, Baycol, Palladone, Trasylol, Tylenol, Darvocet, Heparin and all the drugs now made with ingredients from China without any real standards or controls--i.e. most of them--there's no reason to think an unregulated free market won’t work out just fine. Really, Sarah? So if defective and tainted drugs weed out the weak among us, that’s just the beauty of the Ayn Rand/Milton Friedman world view?

The entire middle class is struggling with unemployment, under employment, mounting debt, lost pensions, mortgages foreclosed or underwater, and you want to undo even the pathetic protections of the 2010 Consumer Protection Act and put Elizabeth Warren’s head on a platter? Really, Speaker Boehner? That’s the job elixir the middle class so desperately need?

As with most religions the Church of Unfettered Capitalism doesn’t have to make sense in order to thrive. But it does need preachers at the pulpit exhorting us to “believe in things that we know ain’t true” and the Republican Party can't get enough of them. Huckleberry Finn would be so proud.
Brian Moench

Dr. Brian Moench is President of Utah Physicians for a Healthy Environment and a member of the Union of Concerned Scientists.

Conservatism doesn't have the kind of historical roots liberalism has - like Thomas Jefferson, John Locke, Adam Smith and James Mill to name a few of the better know liberal thinkers. Conservatism is no more than some cobbled together pieces of old European monarchism, proto-fascism, throw in some corrupted bits of the Old Testament. Modern conservatism has never worked in practice. Start with Richard Nixon up to Reagan and both Bushes. They keep moving further and further away from the Democratic ideals that makes America work and moved ever more to the hard Right. In each stage they have claimed that Nixon or Reagan or Bush 43 failed because they were not pure enough. You know who frequently makes the same argument? Communists. Kind of ironic that conservatives embrace all the authoritarianism of communism yet claim the mantle of the party of freedom. They area sad and pathetic group at best.

Texas Governor Rick Perry Discovered to Be Just Another Right-wing Conservative Pathological Liar

Texas Governor Rick Perry Discovered to Be Just Another Right-wing Conservative Pathological Liar - Rick Perry Doubled Texas’ Debt, Then Balanced Budget Through Accounting Gimmicks

Texas Gov. Rick Perry (R) and Republican lawmakers completely failed to keep their promise not to “kick the can” down the road when it came to solving the largest budget shortfall in the state’s history. That’s according to a new Associated Press report, which concludes that Perry and the GOP legislature largely balanced the state’s budget through flimsy accounting gimmicks that do nothing to secure Texas’ financial footing.

The self-professed fiscal conservatives resorted to tactics like delaying a $2.3 billion payment to schools by one day to technically push it into the next fiscal year and keep it off the books of this budget. They also “found” $800 million by ordering the state’s accountants to forecast a faster increase in land values to show more property tax income:

    Gov. Rick Perry signed a budget that was balanced only through accounting maneuvers, rewriting school funding laws, ignoring a growing population and delaying payments on bills coming due in 2013.

    It accomplishes, however, what the Republican majority wanted most: It did not raise taxes, took little from the Rainy Day Fund and shifted any future deficits onto the next Legislature.

The new budget also preposterously assumes there will be no growth in the number of school children in Texas, even though it is one of the fastest-growing states in the nation. Experts predict this trick alone will shortchange school districts by $2 billion.

Texas lawmakers had to close an enormous $27 billion budget deficit this year. Amazingly, only about a third of it was caused by the economic downturn. The state has had a chronic shortage of revenue after years of slashing property and business taxes and creating numerous tax breaks and exemptions. Conservative governors have slashed state services to the bone, so there was no more fat to cut from the budget.

As governor for over a decade, Perry’s “fiscal conservatism” has doubled the state’s debt from $13.7 billion in 2001 to $34.08 billion in 2009. He’s refused to raise taxes on the wealthy and brags about not dipping into the state’s substantial Rainy Day Fund. (However, Perry’s fellow Texas Republicans claim Perry has appropriated nearly all the money in the Rainy Day Fund, and have asked him to stop claiming that he preserved it.)

Democrats have fought back against the GOP claim that it was truly a balanced budget. “It’s all smoke and mirrors and misdirection,” said state Rep. Garnett Coleman (D).

Conservatism is ultimately an anti-American philosophy composed of smoke and mirrors. That is why conservatives are so quick to wrap their garbage in the flag and the Bible, to deflect any serious analysis and criticism of their bone headed public policy. They so many Americans with average to modest incomes continue to support the smoke and mirrors is truly strange. It is as though they loath themselves and want to be punished.

Republicans Destroying Democracy Step by Step - Undermining Voting Rights

Ohio's Anti-American RepublicansWeaken Election Law By Allowing Poll Workers To Refuse To Inform Voters Where They Can Vote

Last week, the GOP-led House passed an election law overhaul without the highly restrictive voter ID provision. However, the House tweaked the bill to weaken a law mandating poll workers to direct voters in the wrong precinct to their correct voting location. Under the new language, a poll worker need not direct a voter to where they are eligible, adding that “it is the duty of the individual casting the ballot to ensure that the individual is casting that ballot in the correct precinct.”

Allowing poll workers to refuse to help those who are legitimately confused about where they should vote opens the door for increased voter suppression. As state Sen. Nina Turner (D) pointed out, “Voting in the wrong precinct led to over 14,000 registered voters statewide to lose their vote in 2008.” Rating the statement “true,” Politifact reports:

    [T]he second most common reason the ballot was not counted was because while the person was properly registered to vote in Ohio, they cast the ballot in the wrong county or precinct. In all, 14,335 such ballots were not counted for this reason, according to the Brunner report.

    Of those 14,000-plus ballots, 3,423 were cast in Cuyahoga County, home to Turner’s district and by far the county with the most uncounted provisional ballots during the November 2008 elections due to wrong place filings.

As the Cleveland Plain Dealer pointed out, mixing up precincts “most often occurs” in “urban and impoverished areas of the state,” leading Turner to sarcastically suggest of Republicans, “I guess the loss of votes for some doesn’t matter.” The bill now heads to Ohio Gov. John Kasich (R) for signature.

The only votes the elitist fascist-lite Republicans seem to care about are the votes of billionaires like the Koch brothers, racists, xenophobes, fundamentalist thugs who have more in common with the Taliban than Thomas Jefferson, anti-environment wackos, arrogant yuppie frat boys and corporate robber barons.

Who Has Glenn Beck Used for Authoritative Sources - a rabid anti-Semite, a conspiracy nut and an Historian Who Thinks Slave Owners Were The Real Victims

Who Has Glenn Beck Used for Authoritative Sources - a rabid anti-Semite, a conspiracy nut and an Historian Who Thinks Slave Owners Were The Real Victims

During his time at Fox News, Glenn Beck regularly turned to disreputable sources to back-up his wild and unfounded conspiracy theories. Here are five of Beck's least credible sources.

5. Mahathir Mohamad. As part of his long-running smear campaign against George Soros, Beck said that "many, including the Malaysian prime minister, believe it was billionaire speculator George Soros who helped trigger the [Southeast Asian] economic meltdown" in 1997, a reference to former Malaysian Prime Minister Mahathir Mohamad's false and anti-Semitic claim that Soros was part of a Jewish "agenda" to collapse Southeast Asian currencies. In an October 10, 1997, report from the Malaysian newspaper Berita Harian (excerpted by BBC Summary of World Broadcasts, accessed via Nexis), Mahathir was quoted as saying: "We do not want to say that this is a plot by the Jews, but in reality it is a Jew who triggered the currency plunge, and coincidentally Soros is a Jew. It is also a coincidence that the Malaysians are mostly Muslim." Matahir later met with Soros and disavowed his allegation, saying: "Mr Soros said he was not involved in the devaluation of the Malaysian currency and that other people were involved. And I have accepted that." [Fox News, Glenn Beck, 10/5/10]

4. G. Edward Griffin. Beck has repeatedly used his Fox News program to present G. Edward Griffin as a credible authority on the Federal Reserve. But Griffin has an extensive history of promoting wild conspiracy theories, including 9-11 conspiracy theories, the notion that HIV does not exist, and the claim that cancer is a dietary deficiency that can be cured with "an essential food compound." [Media Matters, 3/26/11]

3. Joel Richardson. Beck has hosted author Joel Richardson to discuss religious and social issues. Richardson has a long history of antagonism toward Islam, having written in his book The Islamic Antichrist that Islam will be the "primary vehicle" "used by Satan to fulfill the prophecies of the Bible." He agreed with Terry Jones, the Florida pastor who planned to burn Qurans, that "Islam is of the devil," and wrote a column headlined "What Obama and the Antichrist have in common." [Media Matters, 2/17/11]

2. Eustace Mullins. Beck promoted Eustace Mullins' book Secrets of the Federal Reserve as a resource on the history of the Fed. Mullins was a 9-11 truther who has been described as an "anti-Semitic conspiracy theorist" and a "nationally known white supremacist"; the Anti-Defamation League called the book Beck promoted "a re-hash of Mullins' anti-Semitic theories about the origins of the Federal Reserve." [Fox News, Glenn Beck, 9/22/10]

1. W. Cleon Skousen. Beck has frequently touted the work of fringe anti-communist activist W. Cleon Skousen. A promoter of New World Order conspiracy theories, Skousen claimed that there "exists a relatively small but powerful group which has succeeded in acquiring a choke-hold on the affairs of practically the entire human race." Skousen also published an American history book, The Making Of America, which presented a "story of slavery in America" that cast slaveowners as the "worst victims of the system." Skousen was a staunch defender of the John Birch Society. In a September 2009 Salon.com article, Alexander Zaitchick wrote that Skousen "aligned himself" with John Birch Society founder Robert Welch's accusation that Eisenhower was a "dedicated, conscious agent of the Communist conspiracy." [Media Matters, 9/30/09]

No wonder Beck and his obsequious followers don't know anything about U.S. history, culture, science, literature or politics. Instead of searching for the truth the members of Beckistan and their messiah look for sources that validate their fantasy filled world view rather than the truth. 

In America Work No Longer Pays. Meet The Corporate Republican Nanny State

In America Work No Longer Pays. Meet The Corporate Republican Nanny State

After the longest recession since WWII, many Americans are still struggling while S&P 500 corporations are sitting on $800 billion in cash and making massive profits. Now, economists from Northeastern University have released a study that finds our sluggish economic recovery has almost solely benefited corporations. According to the study:

    “Between the second quarter of 2009 and the fourth quarter of 2010, real national income in the U.S. increased by $528 billion. Pre-tax corporate profits by themselves had increased by $464 billion while aggregate real wages and salaries rose by only $7 billion or only .1%. Over this six quarter period, corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income. …The absence of any positive share of national income growth due to wages and salaries received by American workers during the current economic recovery is historically unprecedented.”

The New York Times adds, “According to the Bureau of Labor Statistics, average real hourly earnings for all employees actually declined by 1.1 percent from June 2009, when the recovery began, to May 2011, the month for which the most recent earnings numbers are available.”

So as average wages fall, and nearly 14 million people remain unemployed, America’s economic recovery has almost entirely benefited corporations. This development adds another chapter to the decline of the middle class, whose incomes are shrinking and wages are stagnating. Last year, top executives’ salaries increased 27 percent, while workers’ salaries increased only 2 percent. At the moment, income inequality in America is the worst it’s been since the 1920s, as the richest 1 percent make nearly 25 percent of the country’s income.

Since the Corporatist Party or Right-wing Conservative Republican party has been once and for all purged of its moderates, they have become captive of narrow corporate interests and billionaires. So there is little chance of say increasing the taxes on wealthy executives in proportion to their unearned windfall of wealth. That would be the fair thing to do, the American thing to do. It would certainly help the economy to put the money earned by labor back in labor's pocket rather than redistribute it to executives who have never done an honest day's work in their life.

Related - Squeezed Dry: Why Americans Work So Hard but Feel So Poor