On July 9 2012, Pat Garofalo writes on ThinkProgress.com:
President Obama is planning to call on Congress today to extend the Bush tax cuts for another year, but only for those making less than $250,000. The Bush tax cut package is scheduled to expire at the end of the year, and of course, Republicans have said that they are only interested in extending all of the cuts, including those for the wealthy. That would mean spending billions of dollars on cuts where more than half of the benefit accrues to the richest 5 percent of households.
The administration, however, claims that it will oppose any extension that does not include the $250,000 cut-off. Obama adviser Robert Gibbs insisted yesterday that Obama is “100 percent committed” to ending the tax breaks for the wealthy.
Republicans, of course, will charge that raising taxes on the rich will inevitably harm economic growth and job creation. However, history has revealed that that’s simply not the case. As this chart shows, annual economic growth has been strongest when the top tax rate was higher than it is today:
Job creation has also been stronger when the top tax rate was higher:
Already, taxes on both the rich and investment income (which for the last few decades has been taxed at a lower rate than wage income) are at historic lows, but they didn’t lead to the job creation that was promised by the Bush administration:
So Republican claims about tax increases on the rich destroying the economy — which they make every time such a policy is suggested — are just fearmongering, with no evidence backing them up.
We will not solve our severe predicament by taxing our way out of the concentrated ownership of wealth that our system has perpetrated and redistributing those earnings through government expenditures. This is not to say that EVERY citizen should pay their fair share of the tax burden.
If we continue with the past’s unworkable trickle-down economic policies, the government will have to continue to use the coercive power of taxation to redistribute income that is made by people who earn it and give it to those who need it. This results in ever deepening massive debt on local, state, and national government levels, which leads to the citizenry becoming parasites instead of enabling people to become productive in the way that products and services are actually produced.
There are actionable policies that will dramatically impact the market economy and strengthen the middle class in a positive and sustainable way, while expanding the base of private capital ownership and thus strengthening the way consumers make the money to purchase the products and services made possible by the new capital formation. The result will be to expand production and bring more wealth to the economy, which will provide not only growth in expanded ownership of productive capital but also in expanded employment opportunities as the economy revs up to meet expanded consumer demand. Furthermore, the more broadly real capital is acquired by individuals throughout our society with the earnings of capital, the more we will profitably employ unused capacity and promote economic growth. With greater earnings from capital worker investment, people will be able to support and pay for products resulting from “greener” technologies that today people cannot afford. Such policies are perfectly in tune with the natural incentive of business corporations to broaden ownership so that the market for their products will increase. Such policies will liberate the economy.
http://thinkprogress.org/economy/2012/07/09/512741/charts-economy-bush-tax-cuts/
