In my last letter, I discussed the history of the $14 trillion debt that we have accumulated. Now I will address the ideologically frozen status of the response offered by Republican legislators, Vicky Hartzler and Roy Blunt.
If you haven't heard the phrase "the need to protect our job creators" as the reason to not raise corporate and higher income taxes, you have very likely not been paying much attention.
As for protecting these "job creators" and the need for lower taxes, corporate America is sitting on $2-3 trillion in cash indicating that they are perfectly content to continue that course. As another quarter of superior profits for the corporations are rolled out, my question is how much money in reserve is sufficient before they feel investment is safe?
Americans are struggling daily and the corporate behemoths want more security. We must bail them out, but we cannot request one additional penny in taxes according to Vicky Hartzler and Roy Blunt.
The IRS recently reported that the top 400 incomes in this country earned on average $270 million and paid an effective tax rate of 18 percent. Middle class incomes in the range of $72,000 paid an effective tax rate of 24 percent. Low income households in the $28,000 range paid at an effective rate of 16 percent. Further, those 400 earned as much as the bottom 60 percent of Americans. If this is class war, most of us have already lost.
General Electric, Exxon-Mobil, ATT, big Pharma, Aetna and Goldman-Sachs are doing quite nicely, but it is impossible to ask them to surrender tax benefits going forward according to Hartzler and Blunt.
Simply, the myth that lower taxes means jobs is just that - myth. Ronald Reagan lowered taxes early in his administration and unemployment soared from 7 percent to 9.2 percent. He then raised taxes 11 times and increased the debt limit 18 times. George H. W. Bush lost an election because he raised taxes. Bill Clinton raised taxes and lost both Houses of Congress. George W. Bush lowered taxes. So what were the economic results of those policy decisions?
From 1980 through 2000, with all those tax increases, our job market expanded by 20 percent in each decade. From 2000 through 2008, job growth shrank by 5 percent. So much for thirty years of "trickle down."
The premise is false and the numbers prove it.