Parsing Republican economic rhetoric these days is almost as difficult as trying to determine the likelihood of Mitt Romney’s presidential nomination. The constant trickle-down propaganda for less taxation of the wealthy has hit shitstorm proportions. Don’t tax small business! It’s the engine of economic growth! Taxing the job creators will disincent them from creating jobs!
No, what disincents small business from creating jobs right now is not the threat of raising the top tax bracket by 4% to Clinton era levels. It’s the lack of consumer demand and the decline in economic growth not just domestically but abroad… not to mention the impending collapse of the euro. It is pure mythology to assert that a modest increase in taxes will kill economic growth and send the nation on the path to a Socialist regime. Income tax rates have been substantially higher, up to 90%, and were in effect during some of the greatest boom times of this nation’s history. I am by no means advocating a 90% tax rate, but I do advocate some restoration of fiscal sanity… i.e. raising taxes at the top by a small amount in order to pay down deficits without having to slash important social programs for those most in need.
How did the party that holds the mantle of fiscal responsibility so high become blind to the cognitive dissonance of simultaneously cutting taxes (revenue) while cutting deficits (debt)? This philosophy of voodoo economics was put forth by Reagan, but notably decried by Bush I. Grover Norquist, the founder of Americans for Tax Reform, has run with Reaganomics ever since, and made it his life’s mission to keep any legislator from ever raising taxes for any reason. He’s the guy you can thank for the debt ceiling clusterfuck.
Back to “job creators.” Many of these mythologized small businesses are in fact 1 person sole proprietors who employ no one other than the owner, e.g. doctors, lawyers, bloggers… (Heh. ) Over 21 million of 27 million small businesses in 2009 census data fit that description. So let’s please drop this whole “small businesses are the job creators” farce. Yes, many small businesses do employ, but many go out of business, quickly taking any nominal amount of jobs they create with them. Think local restaurant or trendy boutique. When economists or politicians speak of “job creators,” they would have you believe that every burgeoning small business is the next Google, whose growth we will kill if we raise the top marginal tax rate. This argument is simply new rhetoric for an old ruse… tricking the public into believing that lowering the tax burden for the very wealthiest will benefit everyone else. The ‘trick’ of trickle-down economics is making people believe in financial unicorns.