10 Things Republicans Don't Want You to Know About the "Fiscal Cliff"
This week, former President Bill Clinton urged calm in the face of Washington's stand-off over the so-called fiscal cliff. "They are moving toward a deal," Clinton assured Americans, suggesting that the current posturing by both parties is "just a Kabuki dance."
Unfortunately, Republicans have called President Obama's $4 trillion debt reduction plan something else: a joke. While Senate Minority Leader Mitch McConnell boasted that he "burst into laughter," House Speaker John Boehner claimed he was "flabbergasted" at the President's "non-serious proposal."
As it turns out, that choice of language is more than a little ironic. After all, Boehner's counter-offer isn't merely devoid of specifics when it comes to his proposed spending cuts and revenue-raising loophole closing. Like Mitt Romney before him, Speaker Boehner's math doesn't--and cannot--work. More pathetic still, it is the GOP which is trying to dupe the American people by continuing to peddle its long-debunked myths about taxes and the debt.
Here, then, are 10 things Republicans don't want you to know about the fiscal cliff.
For years, Republicans have warned that President Obama's proposal to let the Bush tax cuts expire for the top two percent of taxpayers would crush "job creators." As Speaker Boehner cautioned last month:
"Going over part of the fiscal cliff and raising taxes on job creators is no solution at all."
Unfortunately, recent history and nonpartisan analyses alike show that President Obama's proposed $1.6 trillion in new revenue from upper-income taxpayers will have little impact on American job creation. After all, as these charts from the Center for American Progress show, the U.S. economy produced far more jobs and grew at a much faster rate when top-tier tax rates were higher (even much higher) than today:
In October, the nonpartisan Congressional Research Service reached the same conclusion, much to the consternation of Capitol Hill Republicans who sought to bury the report. What the yanked CRS report had to say on the history of tax cuts, productivity, investment, economic growth and job creation was indisputably true:
Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. 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 average real GDP growth rate was 1.7% and real per capita GDP increased annually by less than 1%.
There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth.
For confirmation, you only have to travel back to the Bush presidency, one which produced the worst-eight year job creation record in modern American history. The paltry one million jobs yielded during that period (compared to 23 million under Bill Clinton) prompted New York Times economics reporter David Leonhardt to ask with good reason, "Why should we believe that extending the Bush tax cuts will provide a big lift to growth?"
Last year, columnist Mark Shields posed a similar question in a different way. "Do tax cuts," he asked, "help 'job creators' or 'robber barons'?" To put it another way, if tax cuts for the rich don't drive overall economic growth, then there's no point in continuing to drain the U.S. Treasury in order to pad the bank accounts of the wealthy.