Are Americans 'catching on' tax cuts for the rich don't work?
Posted on Sunday, December 05, 2010 at 08:21 AM
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It stood to reason, he said - if the rich keep more of their money then that will somehow translate into more money and job creation for the American people.
The problem for the GOP is that it didn't, and it doesn't, and the American people may be finally catching on.
As if to underline the fact along comes billionaire businessman Warren Buffet this week, inserting himself into the most contentious tax debate doing the rounds: whether or not we should extend George W. Bush's so-called tax cuts for the rich.
Buffet made two points: Americans at the high-end of the tax bracket have never had it so good and the tax cuts as an economic public policy have not benefited the country.
"The rich are always going to say that, you know, just give us more money and we’ll go out and spend more and then it will all trickle down to the rest of you," Buffet told the press. "But that has not worked the last ten years, and I hope the American public is catching on."
But are the American public catching on? Buffet said that we should keep the tax cuts for the middle class but America's richest could comfortably weather the recession and help cut the deficit by paying tax rates established in the Clinton era, which - incidentally - were still among the lowest tax rates on the rich in modern American history.
"If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further," Buffett said. "But I think that people at the high end - people like myself - should be paying a lot more in taxes. We have it better than we’ve ever had it."
America's had ten years of Bush era tax cuts for the nation's wealthiest, and the time has come to ask where are all the jobs that were promised by the "trickle-down" theory? It's worth asking because "trickle-down" theory has been a sacred tenant of the Republican Party doctrine for decades. It's worth asking before we balloon the deficit for years to come to pay for it.
As The Wall Street Journal reported this week, President Bush has the worst track record for job creation since the American government began keeping records in 1939. The Bush administration created just 1.1 million jobs net, while the Clinton administration created 22.7 million.
So much for "trickle-down."
Aren't economic policies and tax cuts that boost broad-based consumer income and spending a better way forward than making the already unimaginably rich even richer?
Are we finally catching on?
40 Comments
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hancock | Dec 06, 2010, 07:47 PM EST
Captain tom ? Are you a real Captain?
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CaptainTom | Dec 06, 2010, 05:36 PM EST
I don't know about the rest of the American rabble but my wife and I caught on 30 years ago. The results of our recent election show that not enough voters have caught on yet.
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Ajreaper | Dec 06, 2010, 01:05 PM EST
Go with a simple flat tax- we all pay 10%, 12%, whatever. No need then for a tax code that needs an entire wing of a library to be stored in and you eliminate the IRS completely. No matter the rate most everyone thinks they pay to much- just make it simple and across the board for individuals and corporations and be done with it.
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Monsoonman | Dec 06, 2010, 12:39 PM EST
A big eastern state governor, started a site where people could voluntarily donate money for their favorite liberal charities. this was so the state wouldn't have to raise taxes on the whole population. The governor put seed money of 250,000 U.S to start. After a year the fund had 275,000. Nuff said about liberal compassion.
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hancock | Dec 06, 2010, 12:13 PM EST
Taxes are high enough in America, if you want to pay more write a check, or get on a plane.
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ballyhip | Dec 06, 2010, 10:57 AM EST
From Warren Buffett in 2007, “If class warfare is being waged in America,” he wrote, “my class is clearly winning.” We no longer live in the USA but the CSA, i. e Corporate States of America and have for some time. If we were true to the Ayn Rand capitalist model we would have no need for the Export-Import Bank and other government vehicles to aid industry but just try to get rid of them. The myth of the independent man is very powerful.
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Shmrck5S | Dec 06, 2010, 09:29 AM EST
Chico-the most recent numbers I have seen in news reports (more than one report by the way) say that 2% of small businesses report income over the $250,000 mark. How many people in the country are samll business owners? I have no idea, but let's call it 10% to be generous. Even the most conservative of republican could still be elected if he ticked off only .2% (that's POINT 2%) of his electorate for the sake of helping that part of reducing the deficit (the other part being massive cuts in wasteful spending).
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Chico2001 | Dec 06, 2010, 08:07 AM EST
What's wrong with the savings rate going up? Half the time, dudes like Cair here are telling us the savings rate is too low and that consumerism and credit card debt are bad! And by the way, if bankgs had more of our money in savings, there wouldn't have been an excuse to bail them out with -- once again -- taxpayer money.
The central fallacy is that all money is governments first, and it decides what people get to keep from the sweat of their brow.
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TheOldPerfessor | Dec 06, 2010, 08:03 AM EST
I see the faascists here have made their trips to the Fox Spin Room, and came up with nothing but name calling. This discussion is about how well it has worked to cut the taxes of the rich and run up the deficits. It's been a grand social experiment, and we have a clear answer as to how well it works.
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Chico2001 | Dec 06, 2010, 08:01 AM EST
And by the way, I do not find that number in the Wall Street Journal anywhere. You seem to be taking it from a source that fails to count the millions and millions of jobs LOST on 9/11 and in the Clinton recession, but only counts from start to finish. This is disingenuous for the extreme -- and, I notice, you don't mention the millions of jobs created under Reagan, or the statistically full employment throughout Mr. Bush's terms.
I'll tell you, the 4.5% unemployment under Mr. Bush's policies is looking great now as we're at 10% under Mr. Obama.
You also fail to note that many small businesses, the engines of job growth, file as individuals over the $250,000 mark. You act under the pedantic notion that these are all Mr. Monopoly guys swimming around in their bank vaults of cash.
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Chico2001 | Dec 06, 2010, 07:58 AM EST
"It stood to reason, he said - if the rich keep more of their money then that will somehow..."
Now, come on. Nobody ever says their plan is "somehow," and neither did Reagan -- who, by the way, doubled the income to the Treasury in eight years. The trouble was, he didn't hold the Democrats in Congress to cutting spending; they spent all the largess.
You cut taxes and the wealthy spend in the market much more wisely than people like you who think they are smarter than everyone else.
You likewise get it wrong about Bush. Thank God he and Democrats in the Senate joined to cut taxes after the 9/11 attacks. It helped us bounce right back.
Ireland lowered corporate taxes to draw investment, did they not?
If anyone doesn't understand the concept of tax cuts, think of it as a sale. When you want more sales, you cut your prices and sell more volume. I think you do understand, which is why you misrepresent and out-right lie about job creation.
Think of it this way: If you offer 15 teens a piece of candy for every 15 push-ups they do, and 1 for every 5 over that you'll get a lot more production than if you cap the pieces of candy a student can earn at five pieces.
The lie is also put to your points by the fact that even Barack Obama is touting "tax cuts," although he's never actually passed any meaningful ones.
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seamusmoore | Dec 06, 2010, 06:47 AM EST
seagreen: Ireland under Dev followed your economic protectionism policy from 1932-1958 and, quite frankly, it was not a winning formula. Large scale emigration out of Ireland from 1949 to 1963 because there were no jobs; Ireland being the only northern European nation that didn't experience a post WWII economic boom. Sean LeMass and TK Whittaker finally brought Ireland into the 20th century in the 1960's.
Economic protectionism DOES NOT WORK (see Hawley-Smoot Tariff Act of 1930 which turned a severe recession into a world-wide depression. BTW, how does Walmart's lowest price retailing strategy fit into "jack up the price" economic analysis. Go to London sometime and price a Reebok sweatshirt there vs what it costs at Walmart, the price is about double across the pond. I am guessing that you don't like American football or hockey either judging from your comments. I was hoping that you are a soccer fan and might get taken out in the next Hillsborough.
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vincem13 | Dec 06, 2010, 01:46 AM EST
Dear Comrade Cahir: As a journalist, I suppose that only poor people pay you to write stories? If so, you would be the first and only worker in any industry who could make a reliable living working on wages from poor people. The rest of the private sector - I know this is a shock- gets their income from rich people, somehow or another. And here is another shocker for you, comrade. Capitalism is not a zero-sum game. There is always more money to be made, more capital to be created. Until you socialists raise the taxes on the producers enough that they stop producing and hunker down. Then everybody loses. Ah! Then it becomes a Workers Paradise!
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hancock | Dec 06, 2010, 12:35 AM EST
A bunch of off the boat Irish lefties telling us how dumb we are?
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