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Well, it’s official.  Cutting taxes on folks like Mitt Romney DOESN’T “grow the economy.”

The week before last, the Congressional Research Service released a report concluding that reducing top tax rates does NOT affect “saving, investment, or productivity growth.”  In other words, the supply-side justification for cutting taxes simply isn’t true.

The Republican Party has argued for decades that cutting top tax rates would improve the economy.  Obviously, that didn’t work under President George W. Bush – instead, the nation had one of the worst economic crises ever.  Now, Congress has a report that explains why.

You may have never heard of the Congressional Research Service; it’s one of the best-kept secrets on Capitol Hill.  Established in 1914, the CRS “serves as shared staff to congressional committees and Members of Congress.”  The CRS provides “comprehensive and reliable legislative research and analysis that are timely, objective, authoritative, and confidential, thereby contributing to an informed national legislature.

In other words, for almost 100 years, their job has been to serve as fact-checkers for Congress – to tell Congress “what the truth is.”

And the week before last, the CRS told Republican Congressmen that cutting taxes on the rich doesn’t improve the economy.

But have you heard Rep. Paul Ryan mention this study?  Has he made any changes to his prescription for changing the economy?  Has he admitted that his House budget – which would have given the richest taxpayers a tax break of about $300,000 each – was based on an economic theory that has been proven wrong?  Do you think you’re going to hear any of that, in the final weeks of this campaign season.

Image of the tax rate decline.

You can read the CRS report for yourself here.  (Remember, this report is from the researchers Congress relies on to tell them the truth.)

And then tell people about it.  Put it on your Facebook page.  Send everybody you know an email.  Talk about it while you’re waiting in line at the grocery store.

Those of us who work for a living need to talk about this report– because Representatives Paul Ryan, Frank Guinta and Charlie Bass  certainly aren’t going to.

 

Originally posted on the NH Labor News

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Originally posted to The New Hampshire Labor News on Sun Sep 23, 2012 at 01:00 PM PDT.

Also republished by Dream Menders.

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Comment Preferences

  •  kind of a duh moment (7+ / 0-)

    Research into tax cuts has shown for years that the plutocrats do not put the money they get from tax cuts into new businesses and new ventures.  This is one myth like the myth of venture capital creating new businesses; Bain proved venture capital looks to carve up undervalued existing companies and cashing them out.

    Tax cuts for the 1% goes into their bank accounts; government creates jobs.  Millionaires don't.  To quote Ronald Reagan, the EITC is the best thing to happen to the US economy in decades.  Now whom does the EITC target?  Nuff said.

    •  There Has to Be Less Wealth at the Top Than (3+ / 0-)
      Recommended by:
      entlord, NH LABOR NEWS, JeffW

      the economy has demand for investment.

      Otherwise investment in productivity has no point because the markets are already buying all the production they can. So top end investment becomes increasingly gambling.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Sun Sep 23, 2012 at 01:35:25 PM PDT

      [ Parent ]

      •  from what I read it is already gambling (0+ / 0-)

        I don't understand all the tech aspects but the computer programs used for trades are largely untested with code being changed on the fly on live servers.  No one is tracking errors resulting from this and no one knows for sure what the true value of companies is.  Not knowing if the data on companies is true or wrong to what degree makes investing gambling.

        SEC is not making any move towards making Wall Street clean up their act as WS has convinced everyone that they need to make trades in a millisecond.  By the time any error is discovered, it is far enough downstream to make it largely irrelevant.  The article I read predicted a series of crashes coming as a result of inaccuracies built into the system

        •  Trades to the millisecond? (0+ / 0-)

          You underestimate.

          There was a recent article about automated computer trading and how time-sensitive it is. For instance, there's currently plans to run a fiber-optic cable from Europe to Japan through the Canadian Arctic: while this benefits northern Canada because we will be able to hook up to a fiber backbone rather than relying on satellites for communications, the prime driver for this is to hook up London with Tokyo through a shorter cable than they currently have available for trading.

          There's a place in New Jersey that acts as a server center for traders: whenever they add a new server, they replace all the existing patch cable in the building connecting the servers to routers to make sure that all the servers have the exact same length of cable connecting them to the Internet. The difference of a few feet can effect the trading times from one server to another if the cables have different lengths.

  •  Multipliers: (1+ / 0-)
    Recommended by:
    JeffW

    This isn't news. Look at any CBO estimate for the effect of tax cuts on GDP. The multiplier is less than one, usually about .8. That means that you get less than a dollar of economic growth for every dollar of tax cuts.
       Spending programs get estimates usually in the 1.5 range.

  •  Duh, no surprise there (1+ / 0-)
    Recommended by:
    JeffW

    The radical Republican party is the party of oppression, fear, loathing and above all more money and power for the people who robbed us.

    by a2nite on Sun Sep 23, 2012 at 02:14:28 PM PDT

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