Have to give a shout out to Rachel Maddow who on her show reminded me of this report that was finished in September and then quickly vanished down the memory hole before it could get any wide spread coverage!
Back in September when we were all focused on Mitt Romney's many daily gaffes, not the least of which was the 47% tape, Republicans in Congress asked the non-partisan Congressional Research Service to analyze the connection between lower tax rates on so-called "job creators" and economic growth. They were no doubt hoping this non-partisan, highly respected group which congress has pretty much always depended on for hard facts and figures, would come back with solid evidence that cutting taxes on the super rich is good for the economy.
Turns out facts are stubborn things.
From the report:
"The fitted values seem to suggest that higher tax rates are associated with slightly higher real per capita GDP growth rates. The top marginal tax rate in the 1950s was over 90%, and the real GDP growth rate averaged 4.2% and real per capita GDP increased annually by 2.4% in the 1950s. In the 2000s, the top marginal tax rate was 35% while the average real GDP growth rate was 1.7% and real per capita GDP increased annually by less than 1%.
(snip)
_These results are generally consistent with previous research on tax cuts. Some studies find that a broad based tax rate reduction has a small to modest, positive effect on economic growth.25 Other studies have found that a broad based tax reduction, such as the Bush tax cuts, has no effect on economic growth.26 It would be 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."
And here is how they wrap it all up at the end.
"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. 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. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. 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. Tax policy could have a relation to low the economic pie is sliced—lower top tax rates may be associated with greater income disparities."
So lower taxes do not equal more economic growth, but it does lead to a larger gap between the rich and the poor. To be fair this report does not go the extra step of asserting economic growth can be increased by
raising taxes.
It simply states that cutting taxes doesn't work.
That alone was catastrophic for the GOP. This report was released in September, you can click the link below and read it for yourself. It is only 20 pages of plain English large print explanations and charts. But because this report, which was requested by Republicans in Congress, completely destroyed their entire economic philosophy of the last 30 years House Republicans demanded that this report be withdrawn. That it be buried because they didn't like the "tone" or "conclusion" of it.
The Congressional Research Service decided to do just that- against the wishes of their economic research team -and the report disappeared.
Until NOW!
Check it out. Spread the word. We now have the results of one of the Governments best, most non-partisan research institutions backing up the fact that lowering tax rates on the rich DOES NOT STIMULATE THE ECONOMY!
Share this with a Conservative Friend today!
http://www.dpcc.senate.gov/...
12:26 AM PT: Be sure to also check out Chloris Creator's diary on the subject:
http://www.dailykos.com/...?