Just how long is it supposed to take?
Mitt has claimed that he’s in favor of further tax cuts for the rich because such cuts would create investment which would then create jobs and improve the economy as a whole.
OK, Mitt, when?
This theory is not new. It’s been called several names: Supply-side economics, trickle-down economics (benefits to business and the rich would eventually "trickle-down" to the lower classes), Reaganomics, and, way back in the 1890s, the "horse and sparrow theory" (feed your horse enough oats and some will soon pass through for the sparrows - get it?!) The theories all mean pretty much the same thing, but by any name, they’re all a bunch of hooey.
As president, Romney says he’d further cut taxes on the one percenters, despite the fact that the present rates are, as NY Times columnist Paul Krugman recently pointed out, at an 80-year low. The super-rich, the guys clearing millions each year whose net worth is well into nine figures, as the theory goes, still lack the incentive to invest (and thus create jobs) because they fear they’ll have to pay high taxes on their returns, so why bother investing. But if instead you make the rich even richer, then they’ll open their purses and the economy will finally get well.
Again, Mitt, when?
After W was elected in 2000, he immediately cut - by a lot - taxes on the rich. So
Just how long is this supposed to take? Where are the jobs? Where is the economic recovery? The Republicans would answer that there’s nothing wrong with the theory, but we need even lower taxes before the benefits kick in. Perhaps, instead of the lowest taxes in 80 years, why not the lowest in 110 years, before there was an income tax.
There are mountains of studies that show that trickle-down/supply-side/Reaganomics/horse-and-sparrow just doesn’t work, that it’s all nonsense. Most Republican politicians are not dumb; Mitt certainly isn’t dumb. But they must think that we’re dumb (probably because we so often are). Here’s what I think: They know full-well that trickle-down is a myth but they don’t care. If Mitt wins and slashes taxes even lower on the 1 percent, and it doesn’t fix the economy - so what? Their financial backers will pay even lower taxes and thus be even richer - that’s the only certainty in all this - and that’s all they care about. If the voters, we 99 percent, are dumb enough to vote Republican, great. We’ve bought in. They’ve won. They have the last laugh as they seek new shelters in the Cayman Islands to park the new-found wealth. And the economy and the job market will eventually improve (for some reason other than the further tax cut) or it won’t. Nobody can prove it one way or the other.
Under Bill Clinton, that wonderful old hound dog, we enjoyed almost eight years of a robust economy and a record bull market, but did so without benefit of a horse-and-sparrow tax policy. Income taxes under Clinton weren’t really all that high, but were clearly higher than under Bush. Under Clinton, capital gains tax rates (capital gains are the primary source of the super-rich’s wealth) were much higher than the current, almost- too-low-to-believe 15 percent. The dotcom bubble accounted for much of the prosperity and stock market rise under Clinton, but did anybody notice that dotcom entrepreneurs and investors didn’t wait for laughably low capital gains tax rates - they invested anyway (and prospered greatly, if they got out in time). Explain that to me, please.
How can we be so stupid? Maybe this time we won’t be.
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