Taxes, Jobs & Self-Deception
by Bob Henderson
A week ago last Friday, the job-creation numbers for the previous month came out and were disappointing. Unemployment ticked up to 9.1 percent. By 10 a.m. that morning, House Speaker John Boehner was in front of television cameras blaming President Obama’s “tax, spend and borrow” economic policies.
Now, we’ve all learned to tolerate a high degree of hyperbole from our politicians, but these two men try my patience. President Obama has NOT raised taxes, and he hasn’t been president quite two and a half years yet.
Republicans keep accusing him of raising taxes in spite of the fact that $350 billion, more than a third of his nearly $900 billion stimulus bill, was tax cuts. Then, last December, in order to keep from raising taxes on the middle class, he compromised with Republicans and allowed the Bush tax cuts on the top 2 percent of American earners to continue another two years. He also instituted new payroll tax cuts.
So, with the Bush cut taxes now close to a decade old, with Obama’s new cuts on top of them, and with U.S. taxes at a 60-year low, isn’t it time for even Republicans to wonder where the jobs are?
Who said, if someone has made up his mind there aren’t enough facts in the world to change it? Every Republican I know continues to believe the solution to America’s current economic sluggishness, and our ballooning deficit, is more tax cuts. Lowering taxes is a failed economic policy. When it comes to creating new jobs or to lowering our deficit, it has failed and failed miserably!
When President Obama was inaugurated, Americans were losing jobs at the rate of 750,000 a month. Before Obama could turn this disaster around, 8 million Americans had lost their jobs. Since then, more than two million new jobs have been created. Not enough, true. But George Bush created only 4.8 million jobs in his entire eight years, and the predicted depression Obama inherited didn’t happen. We can thank President Obama and the Democratic stimulus for that.
Nonetheless, despite this solid progress, there is much uncertainty about the future.
Instead of Democrats including so many tax cuts in the stimulus in the vain hoping of gaining Republican support, that $350 billion would have been better spent on our deteriorating infrastructure, failing schools and basic R&D. What our economy needs is not more tax cuts, but tax reform, and investment to create American jobs in the 21st century, such as renewable energy sources.
Even Alan Greenspan agrees we need to raise taxes. But more than simply raising taxes back to the Clinton level, which would be a step in the right direction, we desperately need tax reform.
Have you noticed that Wall Street is booming, while the economy in the rest of the country is stalled? That’s because our largest industries, the industries that made America’s economy great and won World War 2, no longer depend for their growth on the growth of the U.S. economy. Too many big American corporations are looking overseas for future growth, and investing in that growth rather than here.
Only tax reform can correct this situation. It is way beyond my knowledge to know how, but if American corporations don’t invest here, our middle class will continue to shrink.
We will turn into Mexico.
As Democrats and Republicans negotiate raising our debt ceiling, Republican demands for drastic spending cuts with no new revenues threaten disaster on the once-great American middle class. Every good businessman knows new capital is the key to growth. U.S. corporations are sitting on that capital, or spending it overseas.
Tax reform can make it in their self-interest to again invest in America.