Previously, in this blog, I've mentioned the idea, held by conservatives, that low tax rates lead to economic growth. This idea has become a kind of religious belief among conservatives, and it's how often they use this argument.
For example, Speaker of the House, John Boehner, said "We've seen over the last 30 years that lower marginal tax rates have led to a growing economy, more employment and more people paying taxes.”
Senator Jim DeMint has been quoted as saying, "But we also need to just cut the top marginal rate for individuals and corporations so that we're more competitive and companies can look way out in the future and know they'll have a competitive tax rate.”
And, finally, the Club for Growth states, “To stimulate GDP growth, a tax cut has to cut the marginal tax rates upon which the decision makers in the economy base their decisions to work and, above all, to invest.”
There's only one big problem with this conservative argument. It's false and, as I've mentioned several times, has no historical validity.
Michael Linden, Director of Tax and Budget Policy at American Progress, addresses the fallacy of this long-held conservative belief in an article posted on the American Progress.
See: http://www.americanprogress.org/issues/2011/06/marginal_tax_charticle.html
"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."
You'd think that prominent conservatives who, more often than not, are criticizing the rest of us for our alleged lack of knowledge regarding the history of this country would be embarrassed to use this historically false economic argument but, when it comes to being parliamentary whores for the wealthiest Americans including corporate elites, it appears Boehner, et al have no shame.
Based on their extreme ignorance of American economic history, and American history in general, I have to question whether Boehner and his crowd were frequently socially promoted while attending the public schools they now want to destroy.
