Tuesday, June 26, 2012
Thom Hartmann: "Why Higher Income Taxes Stimulate Job Growth": Why High Tax Rates Drag Economic Growth Down
What Progressive Talk Radio Host Thomm Hartmann doesn't mention in this video, is before Ronald Reagan was President. The economy was horrible and it was still horrible during the first two years of his Presidency. The 1970s was one of the worst decades we had economically with those high Tax Rates, that Thomm Hartmann and other Progressives speak so highly of. President Reagan cuts taxes across the board in 1981, gets them passed in a Divided Congress, Democratic House and a Republican Senate. President Reagan doesn't pay for those Tax Cuts or his boom in the Defense Budget. But as he admitted later on, if it is a choice between ending the Cold War and a Balance Budget. He takes ending the Cold War and living with a large debt and deficit, that he left for President Bush in 1989. But starting in 1983, the American Economy boomed, 10% unemployment goes down to 5%. President Reagan's Economic Policy is called Supply Side Economics, he didn't invent it, people like Art Laffer developed it in the late 1970s. You cut taxes across the board and you don't pay for them with Budget Cuts, because the theory is that the Economic Growth stimulated by the Tax Cuts, would make up for any lost revenue from the Tax Cuts.
President Reagan and Congressional Republicans were half right, that the Tax Cuts did generate Economic Growth. Because everyone including the Middle Class had additional money to spend and the Middle Class spent that money but not enough to make for the 1T$ or so in today's money that taxes were cut by. And even Mr. Hartmann isn't aware of that or won't acknowledge it, Tax Cuts to stimulate Economic Growth is not new. President Kennedy and President Johnson did this in the 1960s and we saw and Economic Boom by the mid 1960s, both these guys are Democrats by the way. A Liberal and a Progressive Democrat but they also had Balance Budgets back then, President Johnson is still the last President before President Clinton to have a Balance Budget. Thomm Hartmann speaks about the advantages of these high Tax Rates, pre President Kennedy ranging from 25-90% and doesn't mention how bad the economy was in the 1970s.
With those big Tax Rates again from 25-90% pre President Kennedy, recession in the late 1950s, two recessions in the 1970s, with weak Economic and Job Growth mixed in. Taxes were cut in the 1960s, 1980s and 1990s, under two Democratic Presidents and one Republican President. And we had Economic Booms in those three decades, high taxes don't work especially if you are in the Middle Class, when you are struggling just to pay the current bills. Supply Side Economics mixed in with Borrow and Spending, which is what we got from Ron Reagan and George W. Bush doesn't work either. Taxes should be designed based on peoples ability to pay and that encourage productivity and Economic Growth.