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65 Years of Data Indicates: Tax Breaks for the Wealthy Don't Create Jobs

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The New York Times [url="http://www.nytimes.com/2012/11/02/business/questions-raised-on-withdrawal-of-congressional-research-services-report-on-tax-rates.html?ref=business&_r=1&"]reported on Thursday[/url] that Senate Republicans applied pressure to the nonpartisan Congressional Research Service (CRS) in September, successfully persuading it to withdraw [color=#000080][b]a report finding that lowering marginal tax rates for the wealthiest Americans had no effect on economic growth or job creation.[/b][/color]

"The pressure applied to the research service comes amid a broader Republican effort to raise questions about research and statistics that were once trusted as nonpartisan and apolitical," the Times reported. Democrats in Congress, however, [url="http://www.dpcc.senate.gov/?p=blog&id=193"]have resurfaced the report[/url] and published it in full. It can be read below.

The CRS report, by researcher Thomas Hungerford, concluded:

[indent=1][color=#000080][b]The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth.[/b][/color] The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.
[color=#000080][b]However,[/b] [b]the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.[/b][/color] As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. [color=#000080][b]Tax policy could have a relation to how the economic pie is sliced—lower top tax rates may be associated with greater income disparities.[/b][/color][/indent]

Rep. Sandy Levin of Michigan, the top Democrat on the Ways and Means Committee, demanded the CRS explain its decision. "The impartial research and advice provided by CRS experts informs and strengthens the work of Congress. However, this valuable role hinges on the impartiality of CRS analysts and their freedom from political pressure. As with other non-partisan institutions, subjecting CRS analysts to political considerations undermines the legislative process and the American people’s trust in it," Levin wrote in [url="http://democrats.waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/DirectorMazanec.pdf"]a letter to CRS.[/url] "Therefore I was deeply disturbed to hear that Mr. Hungerford’s report was taken down in response to political pressure from Congressional Republicans who had ideological objections to the report’s factual findings and conclusion."

[url="http://www.huffingtonpost.com/2012/11/01/congressional-research-service_n_2059156.html"]http://www.huffingto..._n_2059156.html[/url]

[url="http://youtu.be/0SvGotZGoBE"]http://youtu.be/0SvGotZGoBE[/url]
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Wow, so you mean we've been lied to? LOL...

Who would've ever guessed the top 1% likes the system as is and don't want it to change so they can keep caking it up and keep us in a state of perpetual slavery? Good find Nanuq.

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the problem is that millions of voters treat entirely quantifiable things as a matter of faith

it's no surprise that the jesus party is willing latch on to something demonstrably wrong like supply side economics
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I don't care if they tax the Mark Cubans of the world. I want them to lessen the burden on all the small business owners who are making 100-200 G a year but working 60-70 hours to do so. Let these people breathe. If you want to tax the doctor who plays golf 20 hours a week, more power to you. But leave the guy who is running the only hardware store (other than Lowe's or Home Depot) in a 10-mile radius alone. And ease the burden on companies that have large warehouses so that they can hire 100 new workers a month as their online business grows. Don't keep those 100 jobs from happening because of regulations that really only benefit a handful of people. An imperfect job is better than no job at all.

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How do you differentiate between the two?

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How do you reduce your amount of taxes as a business owner? Reinvest your profits back in your business.

When taxes are lower, businesses have an incentive to take their profits.

When taxes are higher, businesses have an incentive to reinvest, to decrease their tax bill.

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i think i remember seeing that tax breaks for the wealthy have only worked when coming off of record highs.

Otherwise the amount you tax the wealthiest indiividuals seems to have no effect, good or bad.

is the report consistent with this?

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[quote name='Jase' timestamp='1351823920' post='1975715']
i think i remember seeing that tax breaks for the wealthy have only worked when coming off of record highs.

Otherwise the amount you tax the wealthiest indiividuals seems to have no effect, good or bad.

is the report consistent with this?
[/quote]

[b][color="#000080"]"The top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution."[/color][/b]

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[quote name='NanuqoftheNorth' timestamp='1351824066' post='1975720']

[b][color=#000080]"The top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution."[/color][/b]
[/quote]

"you give rich people more money, they'll have more money"
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[quote name='Jase' timestamp='1351824202' post='1975725']
"you give rich people more money, they'll have more money"
[/quote]

[size=4][color=#222222]Actually it is "When the rich extract more money, they'll have more money."[/color][/size]

[size=4][color=#222222]The corporate leaders are extracting a larger and larger percentage of this country's wealth for themselves and leaving less and less for the average worker. Due to their political influence they have also reduced their overall tax rates to historic lows. The richest Americans now pay a smaller percentage of their income in taxes than the average worker. How does that make sense?[/color][/size]

[size=4][color=#222222]Individuals that have more money than they can spend are not going to alter their spending habits based on a tax cut and they are certainly not going to stimulate our economy out of recession.[/color][/size]

[size=4][color=#222222]On the other hand those millions of people that require more money than their incomes currently provide will spend whatever they can get their hands on hoping to make it to the next payday.[/color][/size]

[size=4][color=#222222]If you want to stimulate the economy, you need to get more of our national resources to the middle and lower income brackets. [/color][/size]

[size=4][color=#222222]The best way to do that is for employers to reallocate resources toward providing a living wage for some of the most productive people in the world, American workers. [/color][/size]

[size=4][color=#222222]Unfortunately, over the last several decades the trend has been just the opposite. There have been fewer and smaller increases for the average worker and larger and more frequent increases for the top income earners. Our national economic system is clearly out of balance.[/color][/size]

[size=4][color=#222222]It does not take a degree in economics to realize this imbalance is unsustainable. It is an undesirable trend that can only undermine the well being of our nation's democracy if it is allowed to continue unabated.[/color][/size]

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Couple of questions for you libs:

1. How much do you have to make to be "wealthy"?

2. What type of tax change do you propose for this "wealthy" class?

3. How much is enough for you?

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Complaints about taxes would disappear if the government would stop wasting money on stupid wars, pet projects of Senator X, and sheer incompetence.

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