The ‘Tax Hikes Prevent Job Creation’ Myth

Annual job creation was higher under the Clinton tax rates:

Now, that doesn’t mean there’s a direct correlation between tax rates and job creation. Clearly, though, job creation won’t necessarily be hurt by a return to the Clinton tax rates. It’s an absolute myth that maintaining the Bush rates — or maybe even lowering those rates — would create jobs. Businesses generally do not reinvest the savings from a lower tax rate by hiring more employees.

Bill Kristol is exactly right:

You know what? It won’t kill the country if Republicans raise taxes a little bit on millionaires. It really won’t, I don’t think.

I don’t really understand why Republicans don’t take Obama’s offer to freeze taxes for everyone below $250,000. Make it $500,000, make it a million.

Really? The Republican party is gonna fall on its sword to defend a bunch of millionaires, half of whom voted Democratic, and half of whom live in Hollywood and are hostile to Republicans?

Republicans would do well to listen to Kristol on this one.

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  • GrafZeppelin127

    Why has no one ever pointed out this simple fact:

    In 1993 we raised taxes on upper incomes. Within six years we had the best economy in recent memory, sustained growth, unemployment below 5%, and a balanced budget.

    In 2001 we cut taxes on upper incomes, and did it again in 2003. Within six years we had the worst economy in recent memory, a collapse of the financial system, unemployment over 8%, and a ten-figure federal deficit.

    It’s not that simple, of course. But the fact is that tax rates have little if any correlation to economic performance. GOP fans are always quick to point out that it wasn’t the Clinton tax rates or the 1993 budget act (which no Republican voted for and Gingrich said would destroy the country), but the tech/Internet boom and other market forces that created the 1990s economy. Which only proves one thing: raising taxes in 1993 did not prevent any of that from happening. And there has never been anything resembling an economic boom since 2001.

    So, do we want the tax rates that accompanied the best economy in recent memory, or the tax rates that accompanied the worst economy in recent memory?

    • bphoon

      The 1950’s are fondly remembered by most wingers as a gauzy, warm & fuzzy time that they long to return to. It was a time of prosperity and set up the incredible economic boom of the 1960’s. Marginal tax rates on the 1% in the ’50’s were upwards of 90%.

  • trgahan

    Guess Republicans will have to fall on their swords to protect the 1%, who else will pony up the money for the 2014 mid-term Tea Party express astro-turf campaign?

    As we have seen with all the “I’m taking my ball and going home” whining by CEO’s, who are basically threatening to punish American for re-electing Obama (yeah, that’s what the founding fathers intended), the GOP is behind an eight ball on this issue.

    The big question is, as the debate begins, how long will the American people stay behind the president on this one. They ran away pretty quickly in 2009-2010.

  • muselet

    Republicans would do well to listen to Kristol on this one.

    They won’t, though.

    –alopecia

  • D_C_Wilson

    “Bill Kristol is exactly right”

    Five words I never thought I’d see on this blog.