Thursday, November 1, 2012

GOP Tries To Bury Evidence That Trickle-Down Doesn't Work

The New York Times reported today that Senate Republicans pressured the nonpartisan Congressional Research Service (CRS) two months ago to withdraw a report that confirmed what many people (experts and non-experts alike) had concluded long ago--  that lowering marginal tax rates for the wealthiest Americans had no effect whatsoever on economic growth or job creation.

Republicans claim they had issues with the tone and wording of the report.  But all bullshitting aside,  they clearly objected most strongly to its findings, which undermine the primary fiscal philosophy of the party-- that tax cuts for the wealthy will spur growth and benefit everybody.

The CRS report, by researcher Thomas Hungerford, concluded:
The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.

The report is extensive, but the reasoning behind its conclusion is fairly straightforward. The richest Americans are the least likely to spend extra money they get as a result of a tax cut, and are more likely to save it or invest it offshore. Those on the lower end of the economic spectrum, meanwhile, are the most likely to spend transfer payments they receive from the government.

Democrats in Congress, thankfully, have resurfaced the report and published it in full. It can be read here.

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