In mid-September, the non-partisan Congressional Research Service published a detailed report, documenting what many already knew: giving tax breaks to the rich helps concentrate wealth at the top, but it does not boost the economy. Republican lawmakers, led by Senate Minority Leader Mitch McConnell (R-Ky.), had the report killed.
A fascinating controversy followed, culminating in the facts making a comeback today (thanks to Mike Yarvitz for the tip).
On Thursday, the nonpartisan Congressional Research Service republished an analysis that found no clear relationship between marginal high-end tax cuts and economic growth. [...]
The new version (PDF) stands by the larger conclusion: "This analysis finds no conclusive evidence, however, to substantiate a clear relationship between the 65-year reduction in the top statutory tax rates and economic growth. Analysis of such data conducted for this report suggests the reduction in the top tax rates has had little association with saving, investment, or productivity growth. It is reasonable to assume that a tax rate change limited to a small group of taxpayers at the top of the income distribution would have a negligible effect on economic growth."
Good for the CRS. It's safe to assume McConnell's office will throw another fit -- the notion that cutting taxes on the rich necessarily boosts economic growth is a bedrock tenant of contemporary conservative thought -- but free inquiry and intellectual integrity demand that accurate government reports see the light of day, regardless of political ideology.
To reiterate a point from earlier in the month, it's important to understand that the Congressional Research Service, generally recognized as Congress' own think tank, has a well-deserved reputation for non-partisanship. The CRS is counted on to provide lawmakers with the most reliable and accurate information available, and the notion that partisan lawmakers can pressure, censor, and possibly even intimidate independent researchers is simply unacceptable.
In other words, we just can't have public offices' scholarship being stifled because Republicans find reality politically inconvenient. Our system of government isn't supposed to work this way.
Republicans have adopted trickle-down, supply-side economics as the foundation for their entire worldview. The Congressional Research Service used reliable, objective information to report what most mainstream economists widely accepted -- if the goal is boosting economic growth, giving people who are already rich a tax break doesn't do anything except make the gap between rich and poor more dramatic.
But as is the case too often on the right, it's easier to bury reality than deal with it.
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Sorry folks, but you can't deny trickle down.
Like it or not, labor is a bunch of people standing around with nothing to do, until someone shows up - with an idea and the money to pursue it - arrives needing help. AKA trickle down, and applies to day laborers and rocket scientists alike.
Trickle down only works on a micro level, because the economy is driven by consumption on a macro level. Can the top 1 or 2 percent consume as much as the rest of the country? Of course not. Could a rich person hire a few people? Maybe, but for what? Businesses hire when they have to, not out of some benevolent wish to see the masses employed. To have to, there must be demand. Workers get paid by the income of the business, not the largesse of an owner. If there aren't enough people buying the product because they don't have money, the system collapses.
Sorry, shooter, but trickle-down is a 30-year experiment that has not worked. It's time to try something else.
Doesn't it figure that mc-con-job would be upset about some truthful paperwork and stats have resurfaced that He Attempted to Cover-Up ! The gop/tp just cannot face the truth , Can They ! They WANT What THEY WANT and that's all folks - screw everyone else ! After-all this is the attitude of the goper's and this attitude is precisely why America is in the state that WE are in Today !
TRickel-down!!What are you smoking crack from the 80's?Thats Reagan nonsense that has been discredited for 30 years.Wake up your logic has so many holes in it its' actually see through.
While your points may seem valid on the surface the CRS report is presumably based on real-world evidence that does not support tax breaks for the rich, AKA trickle down, culminating in growth.
Like it or not, entrepreneurs would just be failed business owners without people spending money on their products or services. Trickle up.
This isn't just a chicken or the egg thing, the data supports only one position and it isn't trickle down.
Why, that's easy-peasy! He can borrow it from his parents! (Bain Capital 101)
Sorry, Shooter.... your definition of 'trickle-down' gets you thrown right out of the game. No points scored.
Your employer's 'trickle-down' is probably more attributable to the fact he forgot his Depends...
That logic would make some sense, if only the employers "didn't have money" right now. Corporate profits are at an all-time high; if they aren't hiring right now it has nothing to do with not having enough money to do so.
Like others have pointed out, demand is what drives hiring. Even if a business does not have enough profit coming in to support new workers, it will still hire them if the profit they generate is more than the salary they take - that's why companies take out loans or sell stock to generate capital.
Shooter, you got BURNED by facts and science. That's what economics is: it's science, and in every field of science you have to find observable evidence to back up a hypothesis. The problem is that when all the objective evidence contradicts the Republicans' dearly-held hypothesis, Republicans would rather pretend the evidence didn't exist. (See also religious persecution of Galileo as another example of ideological persecution of facts.)
Golly, Shoots, if we were proposing to liquidate the capitalists and expropriate all of their assets, what you're saying would make sense.
But since what we're really talking about is raising the top marginal rate on adjusted gross income over $250,000.00 from 35% to 39.5%, a rate that both capitalism and the economy somehow managed to survive in the 1990s, you are, as usual, just mindlessly spewing the impenetrable dogma the people who tell you what to think have embedded in your little noggin despite the fact that it makes no damn sense in context.
Shooter I have asked you before and I will ask you again
Show me one time in the whole of American History where it's worked let alone not made things worse? One, that's all just one
Shooter,
We all know how amazingly fast the rich have captured a gluttonous slice of the nation's GDP due to the Bush Tax cuts.
SO where are the jobs! How many years , decades or centuries will it take for you to realize trickle down does trickle down, that is huge amounts flow to the top and a tiny, itty bitty tiny trickle comes back down to us makers of the the product.
You get that? We workers are the makers and the rich gluttons are the parasitic takers. They don't need or deserve the rich man's ENTITLEMENTS embedded in the Tax Code.
Sorry Shooter, but you've fallen prey to several common fallacies.
First, it's essential to distinguish between the person who hires you, and the company you work for. I run a small business, incorporated as a C-corp. That means that my finances are in every sense distinct from the business' finances. Putting more money in my pocket has NOTHING to do with the business' profits. I could win the lottery tomorrow and I wouldn't hire any more people, because that money would be mine; not the business'.
Second, whether a business hires or fires employees should be based largely on profits. Sometimes people are idiots and make stupid choices, but that's the practical bottom line for most businesses. Profits are largely driven by demand; when more people want to buy your goods and/or services, you'll make more sales, which leads to more profits, which leads to hiring people. When fewer people want to buy, the opposite happens. For the vast majority of businesses, this demand comes from the middle class. That means when the middle class has more money to spend, demand increases, and businesses do well. The wealthy in America have record high amounts of money in savings, and yet that hasn't stimulated any job growth, because putting more money in the pockets of the wealthiest does nothing whatsoever for demand.
Third, look to history. When top marginal rates were 70-91%, America was booming. Slice taxes to their lowest point in 50 years and what do we get? Job growth disappears. But greed is a constant, and no matter how much the greedy are taxed, it will always be too much, from their point of view. And so we have people making disproportionate amounts of money, paying less in taxes than ever, who STILL complain about their taxes.
Trickle down econ has nothing to do with employers hiring practices.
It refers to the idea that tax breaks other economic benefits provided by government to businesses and the wealthy will benefit poorer members of society by improving the economy as a whole.
Shooter thinks we're stupid.
Shooter thinks we didn't live through when Clinton raised the top rate, and when W cut it.
Shooter, haven't you learned yet that we're not as stupid as your overlords assume you are?
Shooter:
Yes we can. We deny its feasibility because, well, it's unfeasible. To put it more simply: it doesn't work.
Make bullet-point lists all day long if that's how you get your kicks. Folks like you have been doing that for 30+ years now, and it hasn't changed the truth one iota.
Yup, I don't deny that if I lose control of my bladder that trickle down will be the end result. Hopefully I never do lose control of my bladder.
Yes, the workers are paid by the largesse of the owner. The owner decides who works, how much they get paid, or even whether Americans are hired. No business owner, no jobs. Which part of that are you all not understanding?
Actually I agree with that. Clinton rates didn't inhibit the market bubble or the internet revolution. Bush rates didn't forestall the financial crisis. Rates by themselves are not the sole determinent for quality of an economy. The historical context the rates exist in is. For example...
We had also just won a war for our freedom, bombed our competitors into the ground, and built a huge manufacturing base of our own. Let's also not forget the shelters, deductions, and loopholes available then either. Context my friends, context.
Where do people get their money? From successful business owners. Trickle down.
Yes profits are high, and yes, people are being hired. Just not in the US.
No it isn't. It's psychology. Specifically the psychology of what a person/business/nation will do with a dollar in any given situation. Why do you think economists are usually wrong? Human beings are unpredictable.
Trickle down? Or tax cuts? I can offer you a graph demonstrating how the Bush cuts boosted employment. As you can see the tax cuts going into effect in 2003 really pumped up employment. http://3.bp.blogspot.com/_nSTO-vZpSgc/TUw6hMzI7OI/AAAAAAAAKdo/Lv53LLi50Cs/s1600/nonfarm-payroll-2011-01A.png
Do you know the difference between a regular recession and a balance sheet recession? People are hoarding. Saving, paying bills, getting out from under large debt, even as their major asset is falling in value. Add the Obama anti-business atmosphere, and how much easier it is to make money outside the US, and business starts hoarding too.
Obama voters come in two flavors, those that want free stuff, and those that want to give it to them. You would likely fall in the latter category.
Obama has racked up more debt than Bush in half the time. Why aren't you blaming him?
Shooter only makes a good uncle tom slave , and who would look to someone like that for economic advice ? or how to build a strong nation with a solid middle class ? the only good advice gop voters have on this subject is how to build nation were the rich have their foot on every ones neck , which is the opposite of what our forefathers envisioned , and enshrined in the constitution
Shooter , the only advice we look to your kind for is HOW TO BE A SPINELESS GROVLER , no thanks
Once again, Shooter employs 5th grade logic, and rejects both foundational economic theory and economic study results, thinking he knows more than those with expertise in the field.
Business owners (and corporations, which is another issue) do not hire to "be nice". They hire to meet demand!! If they can't meet demand, they can't make as much money. Workers are simply utilities. Money, since you ask, comes from aggregate demand, not by "raining down" extras on society from feudal lords. The reason our economy isn't moving forward is a demand issue at this point, as has been confirmed by study after study. But you know better.
You are truly hopeless, man. I've tried...
Folks, there's a mountain of empirical evidence and studies that expose the fraud that is supply-side economics. IT'S.NOT.EVEN.CLOSE. You already know that. All you have to do is google. I'll offer this one as a homework assignment:
Take a Walk on the Supply Side | Center for American Progress
It's a simple study that you should read, understand, and be able to recall easily. Despite its simplicity, there is no recovery from it for supply-side economics.
Airball is a Koch-sucker. The only question is which of the Koch brothers' a$$es taste best to him. Laugh at him and ignore. For everybody's good, ignore him.
P.S. If you'd like to be able to come up with the numbers in the study, let me know. I can show you where to get the data and how to do the calculations.
What is demand?
Demand as used here, is people with money to spend. Yes?
More specifically, it's people that have money and want to spend it. Yes?
OK, where do people get money? Let's say jobs and govt. All the money to spend in the country is about $16 trillion. Jobs are responsible for $12 trillion, and govt. for $4 trillion. It's a very big bunch of money. OTOH the payroll tax cut which cost govt. $.5 trillion, amounted to about $10/wk for every household. Not much money at all. For a family of four it's $2.50 a week per person.
Shooter's Law of Govt. says.... a little money from a lot of people makes a lot of money. And a lot of money to a lot of people makes for very little.
OK, do people want to spend the money? Well of course, people always want to spend. Sadly though we can't always spend were we want. Credit is hard/impossible to get so people have to live within their means. Worse, jobs are very hard to come by, and pay much much less than before. Is that an environment to splurge? I think not.
So the bottom line here is that trying to stimulate demand with very little money, to people inhibited by a negative business/financial environment, is wasted. Not to mention the sheer arrogance of trying to fool people into thinking the worst of over. Give it up. Demand isn't going anywhere until Govt quits messing around with people's lives.
You just can't fix stupid. Some people, like Airball, were just born duh masses.
Did you folks know that this site has an ignore-user list feature? If you click on someone's user name, you're taken to a profile screen. On the right side is a series of links, which includes an add-to-ignore-list option. By using that, you can clean up the forums of losers, morons, and trolls like, oh, say, Shooter242.
It's easier than that. That little "exclamation" mark in the lowr right cornor. Click it and it gives the option as well. Never have to leave this page.
Even better.
Even more simply than that, you can just click on the little "exclamation point" at the bottom-right of any given comment, and select "ignore this author" from the brief menu that appears. It's quick and it's easy.
Threads can only be "hijacked" if you give the trolls the attention they crave.
As far as "Shooter" goes, he is a self-confessed troll (most of them, however laughably, at least try to deny it). As he posted to a website dedicated to the subject of trolling:
So, anyone who might be concerned that he was misidentified as a troll can just relax and ignore him from now on... as I do.
It's one thing to engage someone in genuine debate; it's something else again (and not worth anyone's time or energy) to allow a discussion to be "hijacked" by someone interested only in argument for it's own sake (or, worse still, trolling targeted on ideological grounds specifically intended to annoy).
The trouble with ignorance is that it picks up confidence as it goes along.
- Arnold H. Glasow
;-)
PS - I just realized that, while I was formatting this comment (and being distracted, as one sometimes is, by more of that pesky "reality") larry74 and ShadeTail said the essential part much more efficiently.
D'oh!
:D
The problem is you can still see his name...
Don't worry, Shooter...
Thank you, both, Larry74 and ShadeTail - useful ways to make reading comments a less eye-rolling, brain-rattling experience....
I also recommend the ignore feature. It works very well.
I personally prefer the "Shooter-go-away-and-become-a-better-person-with-a-grasp-on-facts-and-reality" option.
Not really necessary shooter , you can not even understand mr benens op's , let alone dem responses , that make your fox news party look like complete fools
Prove your case Shooter. In the last 50 years when has there ever been a sustained period of growth in this country when during a Republican administration your trickle down theory was employed, taxes were lowered, and not to be ultimately forced to be raised again to bail out this Republican Red Herring?
Supply and Demand is a much more potent and real force than trickle-down. So-called "job creators" don't create jobs just because they got too big of a tax refund. They have to have a job that needs filling, which means demand for a good or service that they can supply.
The tax rates being proposed are for net income or profits. By definition, that's after expenses--after you've paid your workers. That's money that the top 2% has already decided NOT to spend on creating new jobs.
Yes, we need business owners. We need capitalists. But to say that one tax rate is fine but one penny more will stifle business is just bunk. And historically inaccurate--see 1992-2000.
--------------
Romney paid under 14% effective tax rate. Under Ryan's plan he would have paid maybe 2% on the same income. Would even those rates have been enough for him to be "patriotic" and bring his income back from the Cayman Islands? I don't think so.
IS there a tax rate that a Republican would gladly pay as his or her patriotic duty? Hello? Any volunteers?
haven't you heard about their new "negative income tax" proposal? you know the one where if you make over a million dollars you get your ordinary taxes nullified and you get paid for helping the economy grow. i hear it's real popular with some folks.
How horrible? Facts and science win over ideology. What is this world coming to?
It's senses, hopefully?
Gosh Dang It!
McConnell has had to battle the liberal bias that brings his poll numbers down somewhere south of the KKK, and now he has to do battle with the CRS over another empirical point.
It's a wonder McConnell doesn't just call it a day and go home and rest in the fetal position! -Kevo
But you can't get the lid closed that way.
but when you do get the lid closed (or, better yet, find the lid closed on some dead American soldier's coffin) they make such dandy soapboxes.
Also if any administrators are reading this, we'd get a lot more mileage out of the ignore feature if it was included right next to the avatar and actually labeled "ignore" with one click. Anyone getting over say 80 percent ignore would have their account killed.
Hey Steve, it's "tenet", not "tenant."
Shooter is a typical right winger who shows the lack of understanidng what his party is doing to this country. He's bought into the 30 second TV spots, lies, misrepresentations from Hanady, O'Reilly, Beck, and the right wingers on the air. Rahter than watching TV, might want to do his own research and getting smart on econmics., both macro and micro. He's so ill infomed that he's likely voted against his own best economic interest, by not being able to see how tax cuts to the rich (who DO NOT create jobs) while unknowingly supoorting the position that would make him forever receiving depressed, stagnent wages. He and the rest of these voters who go Republican need to wake up and start thinking for themselves.
So, they are just looking for something to argue about. How about lightbulbs or famous quotes on money, something really important like that when we're sinking. Maybe they should start watching the news.
The Republicans never let facts get in the way of their view of the world. Didn't Romney even say that "facts don't matter"? At least the report got published.
Not much has been "trickling down" from the wealthiest! How about really getting serious about cooperatives as a new business model? When employees own the company, then it serves everyone.
I hope that we can all wake up to what is really important. And I hope that the elite will have some compassion for the 99% who are struggling at the moment.
And, why do we need to spend so much on the military??? It just dwarfs all the other spending, and no one is even talking about it!
Cooperative ownership should be greatly encouraged. Employee owned businesses should be taxed at a lower rate because they already distribute income more equitably. We should also pass a maximum wage law that ties maximum compensation to minimum compensation within a company so CEO's and top level executives can't walk away with millions of dollars while the lowest average paid employee has to rely on government assistance to get by (which we the taxpayers pay for) Also, remove the cap on social security taxes and eliminate the separate capital gains tax and solely tax on total income so executives and the extremely wealthy won't only pay 15% in taxes.
We were around when trickle down was first perpetrated on the public. It sounded implausible then, and we are still waiting.
Further evidence that voters who vote Republican are oh so gullible and put themselves in the category of the not too bright voting against their own best economic interest; how they cannot see what's right in front of their faces: the lies, the misrepresentations, the fuzzy math, the insanity thrown at them constantly. Could it be that in these Republican poorly funded education states have resulted in the dumbing down of its citizens just to keep the truth from their citizens and the votes for themselves? Is that why all these uber rich Republicans give millions of dollars to get Republicans elected? Keeping from paying their fair share of taxes while pushing the boills on the 98%, of which these ~47% Republican voters are a part, without these vters even relaizing they're being screwed over, has always been the Republican game plan of the last 30 years or so. Look at the states whose majority voted Republican, then you look at where the tax burden rests, look att the wages, look at the spending on education, you see why these states are not the richest in the o@!$%#ry; tax breaks for the rich who DO NOT crreate jobs, resulting in minimal spendable income depressing demand so no jobs would be created, higher unemployment with depressed wages, lower test scores with the 98% suporting the 2%. It's shameful what the Republicans have done to this country. When you see stories like this where the Repbulicans try to hide the facts, one ownders why the 47% continue to vote Republican....