Here is Romney at Wednesday’s debate,

“54 percent of America’s workers work in businesses that are taxed not at the corporate tax rate, but at the individual tax rate. And if we lower that rate, they will be able to hire more people. For me, this is about jobs. This is about getting jobs for the American people.”

and,

“The problem with raising taxes is that it slows down the rate of growth. And you could never quite get the job done. I want to lower spending and encourage economic growth at the same time.”

So DO tax cuts for rich people and already-profitable businesses create jobs? DO businesses hire people when they have extra money? When few customers are coming through the door will tax cuts cause businesses to hire people to sit around reading newspapers or checking Twitter?

I think that people with jobs have money to spend and then the businesses that get their business will hire people, and will make money and be happy they have profits to pay taxes on. And I think that the numbers — and charts that help us visualize those numbers — back me up. Here are some of those numbers.

Michael Linden at Center for American Progress took a look at tax rates and job creation, in Rich People’s Taxes Have Little to Do with Job Creation, Conservative Arguments that Higher Income Taxes for the Wealthy Hurt Employment Don’t Hold Up to Scrutiny,

… in years when the top marginal rate was more than 90 percent, the average annual growth in total payroll employment was 2 percent. In years when the top marginal rate was 35 percent or less—which it is now—employment grew by an average of just 0.4 percent.

And there’s no cherry-picking here. Pick any threshold. When the marginal tax rate was 50 percent or above, annual employment growth averaged 2.3 percent, and when the rate was under 50, growth was half that.

In fact, if you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher. The top 10 years would share marginal tax rates at 50 percent or higher. The two worst years, on the other hand, were 2008 and 2009, when the top marginal tax rate was 35 percent. In the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation.

OK, got that? The periods of highest job growth correspond to the periods of highest tax rates on the wealthy. 70% top tax rates. 90% top tax rates. Maybe this is because that money gets used to build roads and bridges and buildings and ports and dams and the things that make our economy more efficient and competitive. And maybe because the years of low tax rates are the years of government cutbacks because there isn’t enough revenue coming in — infrastructure not maintained, education budgets cut, etc.

What do tax rates do to economic growth? Romney says raising taxes hurts the economy. Is that what happens?

Michael Linden looked at what happens with taxes and GDP growth, in The Myth of the Lower Marginal Tax Rates, Conservatives’ Go-To Growth Solution Doesn’t Hold Up (I’ll spare you the blow-up photo of Speaker Boehner’s face),

The top marginal income tax rate has ranged all the way from 92 percent down to 28 percent over the last 60 years. With such a large range, it should be easy to see the enormous impact of lower rates on overall economic growth, as conservatives routinely claim. Years with lower marginal rates should boast higher growth, right?

That’s definitely not what happened. In fact, growth was actually fastest in years with relatively high top marginal tax rates. Back in the 1950s, when the top marginal tax rate was more than 90 percent, real annual growth averaged more than 4 percent. During the last eight years, when the top marginal rate was just 35 percent, real growth was less than half that.

Altogether, in years when the top marginal rate was lower than 39.6 percent—the top rate during the 1990s—annual real growth averaged 2.1 percent. In years when the rate was 39.6 percent or higher, real growth averaged 3.8 percent. The pattern is the same regardless of threshold. Take 50 percent, for example. Growth in years when the tax rate was less than 50 percent averaged 2.7 percent. In years with tax rates at or more than 50 percent, growth was 3.7 percent.

These numbers do not mean that higher rates necessarily lead to higher growth. But the central tenet of modern conservative economics is that a lower top marginal tax rate will result in more growth, and these numbers do show conclusively that history has not been kind to that theory.

Zaid Jilani at CAP’s Think Progress also takes a look, in Top Reagan Economic Advisor: Return To Clinton-Era Tax Rates Would Not Hurt Economic Growth,

Historically, the United States has actually had some of its strongest periods of economic growth while taxes were high. As this graph from Slate shows, some of our strongest periods of growth in gross domestic product actually occured while taxes were very high:

In the 1950s, which had one of the sharpest periods of economic growth in all of American economic history, the top marginal tax rates for the richest Americans stretched above 90 percent. Likewise, economic growth in the relatively higher-taxed 1990s was much stronger than in the 2000s. This isn’t to say that higher taxes necessarily cause greater economic growth, but it does seem to show that higher taxes do not appear necessarily to be impeding job growth, nor are lower taxes especially helpful.

OK, did you see those charts? Not only do high taxes on the rich not impede growth, but growth looks to be higher when taxes are higher. Maybe this is because higher taxes on the rich means that the government — We, the People — has more to spend on the things that make our economy more efficient and competitive like schools, roads, bridges, transit systems, courthouses, judges, etc…

And, again, the periods of low taxes are the periods of government cutbacks …

David Leonhardt at the NY Times looks at recent numbers, in Do Tax Cuts Lead to Economic Growth?

President George W. Bush and Congress, including Mr. Ryan, passed a large tax cut in 2001, sped up its implementation in 2003 and predicted that prosperity would follow.

The economic growth that actually followed — indeed, the whole history of the last 20 years — offers one of the most serious challenges to modern conservatism. Bill Clinton and the elder George Bush both raised taxes in the early 1990s, and conservatives predicted disaster. Instead, the economy boomed, and incomes grew at their fastest pace since the 1960s. Then came the younger Mr. Bush, the tax cuts, the disappointing expansion and the worst downturn since the Depression.

(Click that graphic for larger)

Whoa, did you see what happened after Bush cut taxes for the rich? Do you remember what happened after Bill Clinton got taxes increased on the rich?

My own 2010 post, Did The Rich Cause The Deficit? included this chart, (The red line is the tax rates, the blue is growth and the red arrow shows the trend.

But, from that post, one thing that cutting taxes on the rich obviously does cause is deficits:

And deficits cause government to cut back, cut infrastructure projects, cut the things government — We, the People – does for We, the People. And the economy slows…

The real job creators are working people with money in their wallets.

Tax the rich, use the money to modernize our infrastructure and help regular working people. Build roads, schools, bridges, ports, airports, dams, courthouses, wind farms, water systems, high-speed rail, municipal transit systems, all the things that make our economy efficient and competitive…

(PS I also came across a chart showing that lowering capital gains rates correlates with lower, not higher, economic growth. But somehow we knew that would be the case…)

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Grover Norquist, the once enfant terrible of the Right, has for years promoted the idea that taxation is theft. He has likened progressive taxation to the Holocaust. Yet so long as those tax dollars flowed their way, there were certain features of “big government” that oligarchs liked just fine – defense contracts, bank bailouts, for-profit prisons, etc. But this new breed of conservative has taken Norquist a step further. Now, if the tax dollars aren’t flowing their way, they seem to view it as theft in terms of lost opportunity cost. Why have low-paid enlisted men perform military housekeeping tasks that can be farmed out to KBR at a markup to taxpayers? They have moved beyond free-market fundamentalism into for-profit zealotry.

For people so concerned with keeping the government’s hands out of their pockets, the ALEC documents reveal that they have spent quite a lot of effort on getting their hands into yours. The Center for Media and Democracy describes ALEC’s public education efforts as an attempt to turn education into a “private commodity rather than a public good.” Charter school expansion is at the top of the agenda, and ALEC-inspired charter school bills have passed this spring in several states. Charter school chains are poised to move in. Public subsidy of charter companies like White Hat and Imagine Schools means private profit not only from state tax monies but also from complex sale-leaseback arrangements on the valuable real estate, private development subsidized at public expense or acquired through eminent domain.

The impulse among conservatives to privatize everything involving public expenditures – schools included – is no longer just about shrinking government, lowering their taxes and eliminating funding sources for their political competitors. Now it’s about their opportunity costs, potential profits lost to not-for-profit public-sector competitors. It’s bad enough that government “picks their pockets” to educate other people’s children. But it’s unforgivable that they’re not getting a piece of the action. Now they want to turn public education into private profits too.

Why are millionaires and billionaires targeting public education? For the same reason banksters pimped mortgage loans. For the same reason Wall Street wanted to privatize Social Security. For the same reason Willie Horton robbed banks.

Answer this question: What is the largest portion of the budget in all 50 states?

Writing in Harpers, Jonathan Kozol wrote,

Some years ago, a friend who works on Wall Street handed me a stock-market prospectus in which a group of analysts at an investment-banking firm known as Montgomery Securities described the financial benefits to be derived from privatizing our public schools. “The education industry”, according to these analysts, “represents, in our opinion, the final frontier of a number of sectors once under public control” that “have either voluntarily opened” or, they note in pointed terms, have “been forced” to open up to private enterprise … From the point of view of private profit, one of these analysts enthusiastically observes, “the K-12 market is the Big Enchilada”.

The animus toward public education isn’t really about big government. It’s about corporate America’s insatiable appetite. Big government is just fine by them so long as public money is flowing their way. It’s the rest that is wasteful spending. What they want now is a piece of the action from remaining large blocks of public funds, like Social Security and … public education.

From this perspective, it’s bad enough that states are not providing education on at least a not-for-profit basis. But it’s far worse than that. They’re giving it away! That’s a mortal sin. A crime against capitalism. The worst kind of creeping socialism. Hundreds of billions of tax dollars spent every year in a nonprofit community effort to educate a nation’s children, and the moguls are not skimming off the top. The horror.

So just as the business community tried with Social Security, there’s a massive effort to convince America that there’s something wrong with the public being involved in public education. If the public cannot be convinced, corporate-funded groups like ALEC obviously consider state legislators a softer target.

But This Time It’s Different

Republicans always offer something called a “jobs plan” and the plan is always tax cuts for the rich while gutting the things We, the People — a.k.a. government — do for each other. Their “jobs plans” always end up enriching the already-wealthy while messing things up really bad for us.

But this time is different because this time they actually offered something that is called a “jobs plan.” So there you go! And this time the plan is different because this time the plan is to cut taxes for the wealthy and giant corporations, cut government protections for working people and the environment, but also opening our borders to let in goods made in countries unhampered by democracy’s protections while cutting taxes on companies that offshore jobs. So Bob’s your uncle.

It will work. Republicans always promise their plan will work, and then it messes things up for most of us, but this time it’s different because this time they say the plan will work. So this time it is different.

The “Plan”

You can look over the official Republican job plan here (PDF): The Republican Plan for America’s Job Creators. Here is a summary of the points: (summary: cut taxes for the rich, cut the things We, the People do for each other, send factories out of the country.)

• Require congressional (anonymous corporate campaign donations) approval of any significant federal regulation (overriding scientists and experts in the executive branch).
• Let companies bring overseas (offshoring jobs) profits into the US without paying US taxes.
• Pass “free trade” (more offshoring of jobs) agreements with Colombia, Panama, and South Korea.
• Streamline the patent system.
• Give more non-Americans visas to to take professional-level jobs here because “high-tech companies in America are struggling to hire qualified employees.”
• Let the FDA approve drugs (Vioxx) and devices faster, with less testing.
• Expand oil and coal exploration and production (Deepwater Horizon oil spill, climate change).
• Cut government spending (Medicare, but don’t touch military) by almost $6 trillion over the next ten years.

(Note, regarding the phrase “job creators,” see Actually, “The Rich” Don’t “Create Jobs,” We Do.)

What’s New In This Plan?

Nothing.

But this time the plan is to cut taxes for the rich, cut the things We, the People do for each other and send more factories out of the country. This time it’s different from those other plans to cut taxes for the rich, cut the things We, the People do for each other and send more factories out of the country.

The Name Is The Game

It’s all in the name. Republicans think giving a plan a name is what matters, no matter what the plan actually does. Say whatever you need to say, but do what you wanted to do all along. They believe that people will be fooled into thinking something does a certain thing because the name says that is what it does, regardless of the actual details and results. For example, their budget plan cuts government “costs” by eliminating Medicare and replacing it with something entirely different, but since it is still named “Medicare” it still is Medicare.

So today they are recycling the usual stuff and naming it a “jobs plan,” are we are supposed to think therefore it means it is a plan that will create jobs. But really, it means sending even more money to a few at the top at the expense of the rest of us and of our country’s future.

Been There Done That — Made A Real Mess

Everything they are proposing has been tried, and tried again, and has not worked. After Reagan took office they cut taxes, deregulated & gutted government, etc. terrible debt, trade deficits, the S&L crisis, wage decline, etc. resulted. After George W Bush took office they again cut taxes, deregulated, stopped enforcing the remaining laws and regulations, privatized government and contracted the functions to cronies, expanded oil drilling and opened the borders to trade with countries that pay very little and have no environmental protections, and we saw what happened.

We are living through the nightmare that resulted. Worldwide financial collapse. Tens of thousands of American factories closed. Millions of jobs lost. Millions of lost homes. Wars. Climate change unaddressed and worse. Terrible concentration of income and wealth. Terrible trade deficits. Terrible debt. Pensions gone, savings gone, heath care benefits gone, government rampantly corrupt, unprosecuted corporate fraud common, oil spills, mountaintops removed, miners killed … a terrible, terrible list of bad results that just goes on and on and on and on and on…

Some Republicans fervently believe that doing these things will help, but the rest of them understand exactly what they are doing. These are not stupid people, and all you have to do is look around to see what actually happens in the real world when you do these things. They do them precisely because these are the results.

The Party Of Wall Street And Billionaires

Here is a fact: today when you hear from Republicans you are hearing from Wall Street, giant oil companies, huge multinational firms and a few billionaires, period. OK, maybe you also get a dose of religious right with your tax cuts, but really they just say that stuff to get those votes, too, but what they actually do is tax cuts and policies that enrich the already-wealthy at the expense of the rest of us. And the things they do always mess everything up.

But this time it’s different. It really is.

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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A lot of these things conservative tropes fall apart when you apply some basic common sense. Imagine if being really rich. You probably live somewhere that you like quite a lot — otherwise, what’s the point of being wealthy? You’ve established a life in that place, and no doubt value the community, the local school system, your friends, the local climate, amenities, etc.

The idea that a very modest tax hike would cause you to up and move your whole family just to save a few dollars on your tax bill seems silly on its face.

And it is:

Anti-tax advocates contend that higher taxes on the wealthy lead to millionaire flight. They say this has been seen in Maryland, Rhode Island, New Jersey and New York. The rich are mobile, they say. They can take their money, taxes and jobs wherever they are treated best.

But a new study focusing on New Jersey provides some of the most detailed evidence yet that so-called millionaire taxes have little effect on the movements of millionaires as a whole.

The study, by sociologists Cristobal Young at Stanford and Charles Varner at Princeton, studied the migration patterns of New Jersey’s millionaires before and after 2004, when the state imposed a “millionaire’s tax” that raised rates on those earning $500,000 or more to 8.97% from 6.37%.

The study found that the overall population of millionaires increased during the tax period. Some millionaires moved out, of course. But they were more than offset by the creation of new millionaires.

The study dug deeper to figure out whether the millionaires who were moving out did so because of the tax. As a control group, they used New Jersey residents who earned $200,000 to $500,000–in other words, high-earners who weren’t subject to the tax. They found that the rate of out-migration among millionaires was in line with and rate of out-migration of submillionaires.  The tax rate, they concluded, had no measurable impact.

“This suggests that the policy effect is close to zero,” the study says.

Earlier this month, the Political Economy Research Institute at the University of Massachusetts (PERI) released a study by Jeffrey Thompson that concluded that the availability of jobs, rather than relative levels of taxation, is the leading factor that causes people to move from one state to another. It also found ”that the impact of taxes on cross-state migration is very weak.”

Other factors—primarily employment and family concerns—provide the main reasons that families move. And family ties, comfort with their community, jobs, the costs of moving, and valuing the public services in their state are why families stay put, regardless of their state’s tax rates.

Thompson’s analysis finds that employment opportunities in a state have the strongest influence on migration—people tend to move into states with lower unemployment rates, and out of states where jobs are scarce. Similarly, affordable housing markets, low levels of property crime, and higher median incomes attract people to a state.

But it’s always a mistake to look at taxes in isolation. They pay for public goods, and Thompson found…

… that public services can influence cross-state migration. By increasing higher-education enrollment, decreasing property crime, or improving housing affordability, for example, states can attract and retain people. “Regardless of how they feel about the tax itself, people value the public services paid for with those taxes,” said Thompson.

So, it’s entirely possible that higher tax rates, spent on better public services, can actually attract people to a state — the diametric opposite of the conservatives’ go-to narrative on state taxes.

Cross-posted at AlterNet.

The informed reply goes something like this:

1. The crisis isn’t real. It’s been fabricated by the neo-liberal politicians whose goal is to eliminate all taxes on rich people and bust structures like unions that afford the non-hyper-wealthy with some leverage in the American political economy. It. Isn’t. Real.
2. You’re blaming the wrong people. To the extent that I accept arguments that we do need to cut spending (and I do, by the way – read on), whatever problems we do actually have are the direct result of Republican taxation policies.

So, for the sake of argument let’s say America has a serious financial problem. How would I solve it? Well, I’m no economist, but here are some ideas:

1. Eliminate Bush’s tax cuts for the wealthy. That’s well over $300B right there. That would pay 1.4 million teachers for five years, ballpark. You know, since teachers are such an ungodly drain on the economy.
2. Get out of Iraq. There’s another $100B per year. And then get out of the military adventure business for good. Right now the US spends about as much on its military as the rest of the world combined, and there’s no moral, ethical or economic excuse for it.
3. Take a chain saw to waste in the military budget. Things like the F-22 Osprey, which has already wasted $22B and will likely cost another $75B to finish. By the way, it’s unclear that the damned thing will actually work, and once you get past the contractors and their pet Congressweasels nobody seems to want it.
4. Let’s have a good, hard look at the corporate tax code, because ExxonMobil, GE, BoA, Chevron, Boein, Valero, Goldman Sachs, Citigroup, ConocoPhillips and Carnival Cruise Lines combined to pay damned near no taxes, despite often-record revenues. In fact, between tax credits, refunds and bailouts, these companies hit us up for trillions of dollars in the past year or two. I’m not accusing any of these companies of breaking the law, and the way the laws work they’re actually required to behave in this way. All I’m saying is, you know, you earn billions and billions in profit, maybe the tax code should be structured so that you pay your fair share in taxes. That’s all.

Once we’ve done these things, then let’s see where we are.

I know, I’m just a simple country boy. And I didn’t major in math by any stretch. But it looks to me like this plan has us up over a trillion dollars in five years (maybe a whole lot sooner, depending on how we parse item #4).

From where I sit, it just doesn’t seem right to go after the little guy first just so we can make sure that Charlie Sheen, Paris Hilton and the Koch brothers can have a tax cut.