By Patricia L Johnson
Speaker John A. Boehner (R-OH) made the following statement on November 9, 2012, which is the same position the Republican Party has taken for years on the subject of taxes.
“Raising tax rates will slow down our ability to create the jobs that everyone says they want,” said Mr. Boehner
The Congressional Research Service (CRS) prepared a report comparing job growth under President Clinton and higher tax rates, to job growth under President Bush and lower tax rates.
As usual, the numbers speak for themselves (see graphic above).
The annual average on Private employment growth doubled under higher taxes, while business investment growth nearly doubled increasing from 5.6% to 10.3%. In addition, seven of the nine major economic indicators increased under higher tax rates. One remained the same, and one decreased .2 percentage points.
Data from 2001 and 2002 was not included in the calculations due to the fact the tax increases were not fully impletemented until 2003. Data from 2008 was not included due to the Great Recession which began that year.
GDP growth was also higher at an annual average of 3.9% under higher taxes, compared to 2.7% under lowered tax rates.
Two of the major tax cuts passed during the last decade were the Economic Growth and Tax Relief Reconcillation Act of 2001 – P.L. 107-6 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 – P.L. 108-27. Please note the word “growth”. The tax cuts were intended to spur job growth in this country. That was the entire purpose of providing the cuts, but they were a gross failure and the country ended up losing more than 8 million jobs due to the tax cuts and subsequent recession.
Many times I have commented in my articles on how the public is being brainwashed by hearing things over and over again. If you hear something 10 or 12 times, most of us start believing it’s fact.
Is it possible the Republican Party has been so busy trying to brainwash the American public on how tax increases prohibit business growth that they have brainwashed themselves into believing it’s an actual fact? If not, how does one explain their ignorance on the subject of job growth, taxes and our runaway deficit?
The April 2011 CRS report on the budget deficit makes a crystal clear statement that the tax cuts were the major factor in our deficit as follows:
‘For the decade as a whole, it can be estimated that legislative changes have increased deficits, relative to the 2001 baseline projections, by $6.9 trillion. Laws enacted in 2001 and 2003, notably the “Bush tax cuts,” generated the largest 10-year increases in budget deficits.’ Source: Reducing the Budget Deficit – Policy Issues – CRS 41778
The Congressional Research Service is the policy research arm of the United States Congress. These are the experts assigned the task of researching the pros and cons of the various policies put forth by Congress. Speaker of the House Boehner would do well to start reading facts rather than relying on fiction.
© 2012 Patricia L Johnson