On Wednesday afternoon, Center for American Progress reporter
Scott Keyes reported on comments made by Utah Republican Senator
Mike Lee.
According to Keyes on Think Progress:
Cloaking his predilection for the rich as concern for the less
fortunate, Sen. Mike Lee (R-UT) argued Wednesday that raising taxes
on the wealthy would primarily hurt the poor. Lee’s comments came
on former Arkansas Gov. Mike Huckabee’s (R) radio show as the two
discussed the looming fiscal showdown in Congress.
….
This prospect, frequently repeated by conservatives, that
raising taxes on the wealthy will decimate the economy and destroy
job creation (and thus hurt the poor) is simply not supported by
empirical evidence. As these
three graphs show, the nation’s best GDP growth and job
creation rate in the last 60 years actually occurred when the top
marginal income tax rate was between 75 and 80 percent. The worst
period for both measurements occurred when the top rate was 35
percent, as it stands today. In fact,
job growth and
gross domestic product has little, if any, correlation to the
tax rate on wealthy Americans.
Unfortunately, Keyes’ opinionated article misses two key
qualifiers in explaining the full picture related to job growth and
tax rates:
First, as I
explained last week in a post at Newsbusters refuting similarly
misleading statements by Paul Krugman about tax rates and the
economy, today’s economy is not comparable to the one seen decades
long-gone, for two primary reasons: first, we didn’t have a growing
entitlements crisis decades ago. Second, we had never-before-seen
economic dominance in the decades following World War II, dominance
that is not seen at all today, and our leadership in the field of
education has slipped dramatically. So it is wishful thinking to
compare today’s economy to the one seen when tax rates were at
80%.
While Keyes is not a Nobel Prize-winning economist, it’s
disappointing that he failed to provide context to a key part of
his article.
Second, the history of tax increases on the rich shows a
distinct impact on the non-rich. Consider that the
individual income tax and Alternative
Minimum Tax originally targeted the uber-wealthy, yet now
greatly impact the middle-class and lower-middle-class. And as
graphed by
the think tank Just Facts, the Congressional Budget Office expects
“bracket creep” to raise taxes on all Americans — including a 71%
increase over the next 25 years on a two-parent family with two
kids earning the median income.
Now, technically, Lee was making an economic, not a tax
argument, against tax increases on the wealthy. But since Keyes
never makes this clear, it’s perfectly legitimate to point out how
the liberal inclination towards taxing the rich invariably taxes
the non-rich.
The Center for American Progress is decidedly liberal, and has
been credibly accused of having an unusually close relationship
with the Obama Administration, which seems to have made taxing the
top 2% of earners its first post-election priority. Never mind that
the top 1% earns 50 times as much as the bottom 20%, on average,
yet pay 1,500 times as much in taxes. Or that raising taxes on
the top 2% of earners would only pay for
1.88% of the next decade’s spending.
Even the Washington Post’s editorial page is
calling for President Obama’s leadership on entitlement reform
to prevent a fiscal crisis, one that would definitely impact the
poor the most. Yet Think Progress and much of the rest of the
liberal establishment are refusing to acknowledge these facts, and
would rather focus on economically harmful class warfare.
