Saturday, July 14, 2012

Chart Explodes Myth that Lower Taxes Lead to Growth


The thing about lies and myths in politics? If you repeat them enough times, people start to believe them. So, when the right wing says over and over that more tax cuts are needed to fuel the economy, and the media doesn't call them on it (mainstream media), people believe it's true. And unless enough people on TV and online explain that it's NOT true (Paul Krugman, Robert Reich), it remains an accepted "fact" of modern life. But here's the thing about that specific assertion: it's not true. In fact--whaddya know--just the opposite is true! From World War II on, tax rates have steadily fallen--and so has GDP growth, over time. Today, tax rates are the lowest they've been in 30 years, yet the economy remains sluggish, and unemployment is high. There are obviously other factors at work, but lower taxes DO NOT lead to more growth. As Marketplace's Kai Ryssdahl would say, "Let's do the numbers." 


10 comments:

  1. What?? This chart sucks. Its saying for every dollar I would have made from 1954-60 91 cents would have gone to the Government? And that's GOOD? I'm obviously missing some pertinent information here...giving the government more money to waste and divert via corruption is never a better answer.

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  2. What you're missing is the facts, Anonymous. Government spends taxes on infrastructure which enables industry and individuals alike to prosper. Infrastructure like roads, communication, police & fire protection, courts, schools, prisons, and regulations which protect us from corporate pollution and greed. This is not "wasted" and the corruption that does exist is almost always done by wealthy interests seeking special favors at odds with the public interest.

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  3. Anonymous: These are TOP tax rates. Unless you were rich, you had a much LOWER tax rate. Also, it doesn't take into account tax breaks and loopholes that were available, but the main point of the chart is that during times of HIGH TAXES we also had times of some of the highest growth rates in our country's post-war history. As for your comment " I'm obviously missing some pertinent information here" -- yes, that's exactly right. The right wing in this country believes that lowering taxes = economic growth. This chart CLEARLY SHOWS that this is not even remotely true.

    Last thing: The Bush tax cuts, which favor the wealthiest in the country, have NOT led to growth in jobs, even as big business experiences record breaking profits. Thanks for stopping by. ~ Groobiecat

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  4. Lower taxes, lower employment growth, lower GDP growth...lower upward social mobility. This must be the kind of America John Sununu believes in

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  5. Bring back the late fifties tax structure.

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  6. If we are going to look at the table alone, it clearly shows that the lower the tax rates, the lower the GDP as well. In the present world, people work harder in order to get a higher salary. However, in the real setting, taxable income causes every worker to take home less than the expected amount. It's sad but a reality. form 2290

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  7. The truth of the matter--and one that people are afraid to talk about because it implies the EVILS OF SOCIALISM!!!--is that the government has always played an integral role in our economic well being. This is an historic fact. But the democrats are afraid to say it and the republicans refuse to admit it. It works like this: fuel the economy with money, more people work, that creates demand, companies produce more and hire more to do it, those people buy more, all new people pay taxes, etc. It's how the engine of the economy works. But the right has refused to do anything about it this time because they hate Obama more than they love their country.

    It's an insidious form of racism.

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  8. I never believed how I could detail my deductions, but I didn't earn a lot of cash, nor did I have any true savings so I figured it didn't apply to me nevertheless, persons like me can and should checkout itemizing their deductions, since it can be actually beneficial! See if you have been missing out on big tax deductions by not itemizing like me here:

    http://tax-defense-network-deductions.com/facts-about-deductions/tax-defense-network-itemized-deductions/

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  9. Penalty abatement brings much relief to a taxpayer because many times penalties can add as much as 25 percent of the total tax debt.

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