September 12, 2012 by David K. Sutton
Two More Reasons Tax Cuts For ‘Job Creators’ Is Nonsense
Tax cuts for high-income earners, who Republicans call “job creators,” is not only wasteful, it doesn’t work. Today we are given two more reasons why.
First up, New York Mayor (and billionaire) Michael Bloomberg said during a speech in Washington D.C. that taxes are “usually not the most important” element for a business. He thinks politicians need to stop fixating on taxes.
Usually the pundits think of this [improving business] as lowering taxes. — But taxes are just one element of the environment…and usually not the most important. The first question most entrepreneurs ask is not can I afford the taxes…it’s not that. It is: Who are my customers, and where do I need to be to serve them, and how do I get up and running quickly?
You show me a business person who cares about his federal tax rate more than his customers, and I’ll show you Darwin at work. – Mayor Bloomberg
Next, a new study shows that tax cuts for high-income earners do not stimulate the economy.
“Almost all of the stimulative effect of tax cuts,” Zidar found, “results from tax cuts for the bottom 90%. A one percent of GDP tax cut for the bottom 90% results in 2.7 percentage points of GDP growth over a two-year period. The corresponding estimate for the top 10% is 0.13 percentage points and is insignificant statistically.”
Zidar’s study provides more empirical backing to what the U.S. has experienced over the last 30 years. Supply-side tax cutting policies have not led to the growth their Republican proponents promised. The Bush tax cuts, for instance, were followed by the weakest decade for economic expansion on record. – New Study Finds High-Income Tax Cuts Don’t Stimulate Economic Growth, ThinkProgress