Friday, December 16, 2011

Some stuff I didn't have time for #4

GOPpers are forever railing against raising taxes on the rich because it will hurt the "job creators." GOPper Sen. John Thune says "it's just intuitive" that the proposed surtax on millionaire incomes to pay for a further cut in the payroll tax would hurt the ability of businesses, especially small businesses and start-ups, to hire.

So NPR decided it wanted to talk to some of those whose ability to hire would be affected.
NPR requested help from numerous Republican congressional offices, including House and Senate leadership. They were unable to produce a single millionaire job creator for us to interview.

So we went to the business groups that have been lobbying against the surtax. Again, three days after putting in a request, none of them was able to find someone for us to talk to.
So they put up a notice on Facebook and got several responses from some "millionaire job creators" who would be affected by this surtax. And what did they say?

"It's not in the top 20 things that we think about when we're making a business hire," said one.

"If my taxes go up, I have slightly less disposable income, yes. But that has nothing to do with what my business does," said another.

"I, like any other American, especially a business owner, I want to make as much money as I can and I want to keep as much money in my pocket as I can, but I also believe in the greater good," said a third.

Thune insisted those are "outliers" and that "most" small business owners agree that raising taxes hurts employment. It's just that, well, neither he not his business lobbyist friends can't actually produce any.

Footnote: I've mentioned this a couple of times on the show, but this seems a good spot to put it up here.

The notion that tax cuts reduce unemployment is thoroughly bogus. The thing - the only thing - that affects unemployment is demand. Demand for goods and services to be provided by government or the private economy. Not tax rates.

I know that seems counter-intuitive; it seems logical that cutting taxes, "putting more money in people's pockets," would increase demand and thus jobs to meet that demand. But the facts say otherwise. Just consider this:

The so-called "Bush tax cuts," the ones that were supposed to expire at the end of last year (and were intended, we were assured, to stimulate the economy), went into effect on June 7, 2001. At that time, unemployment was 4.5%. Since then, we have 125 months of data (July 2001 to November 2011, inclusive).

Across that time, the unemployment rate was below 4.5% precisely four times. Specifically, it was 4.4%. Never lower. It was at 4.5% just four more times. All eight of those occasions came in one nine-month period from September 2006 through May 2007. Every other month in the time, a total of 117 out of 125 months, unemployment was above where it was at the beginning. That's nearly 94% of the time. Indeed, unemployment has been at or above 5.5% - that is, a full percentage point above the beginning, for 76 of those months. Even if you were to ignore the last 35 months of data (i.e., all of 2009, 2010, and so far in 2011), there are still 41 months out of 90 at or above 5.5%.

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