Our Republican friends in Congress don’t speak of the wealthy, or the well-heeled, or — heaven forbid — the robber barons. No, the rich are referred to respectfully and euphemistically as “job creators.”
That would be as in House Speaker John Boehner’s committing to “end the uncertainty plaguing job creators.” And how do we do that? Boehner’s answer: by “ending the threat of tax hikes.”
The front-runner among likely candidates for the 2012 GOP presidential nomination, former Massachusetts Gov. Mitt Romney, stated after President Barack Obama recently urged ending the Bush-era tax-cuts on those earning over $250,000 a year that, “The last thing we should be doing is raising taxes on the job creators.”
Of course, that’s exactly what the only Democrat since Franklin Roosevelt to win a second White House term, Bill Clinton, did in 1993. Without a single Republican supporting him in either the House or the Senate, Clinton raised the income tax rate to 39.6 percent for the most prosperous — the top 1.4 percent of Americans. We were told by the leading Republican crepe-hanger of that era, former Texas Sen. Phil Gramm, that “(President Clinton’s) tax bill is a one-way ticket to a recession.”
What followed is history. Even with that onerous burden on the most affluent, more than 21,844,000 new private-sector jobs were created during Clinton’s presidency. This was immediately followed by President George W. Bush, who was totally committed to lightening the load on the moneyed “job creators.” Bush cut the top rate from 39.6 percent to 35 percent, which according to the respected Tax Policy Center, meant a 7.3 percent average increase in after-tax income for the most privileged 1 percent of earners — oops, job creators.
By way of comparison, the effective federal tax rate for the 400 highest earners during the first Clinton administration was 30 percent on an average individual income of $50.9 million. By 2007, after the Bush tax cuts had kicked in, the effective federal tax rate on the 400 highest earners had fallen to just 16.6 percent, while the average individual income had swelled to $345 million.
Major problem was that very few jobs were created during Bush’s eight years in office. In fact, on the day Bush in 2009 left the White House, there were actually 673,000 fewer Americans employed in the private sector than were on the day of his first inauguration in 2001.
But at least those “job-creator” tax cuts pay for themselves, right? Not so, according to two chairmen of Bush’s Council of Economic Advisors. Chairman Greg Mankiw in his textbook wrote that there is “no credible evidence” that tax cuts pay for themselves. More emphatically, Mankiw wrote that an economist who makes such a claim is a “snake oil salesman who is trying to sell a miracle cure.” Chairman Edward Lazear in testimony before the Joint Economic Committee of the Congress stated that, “I certainly would not claim that tax cuts pay for themselves.”
With all this evidence, then, why do so many elected representatives — mostly, but not exclusively, Republicans — persist in championing more and larger tax cuts for the gilded plutocrats — sorry, job creators — as the silver bullet to guarantee national prosperity?
For an answer to that question, I quote the unvarnished candor of a great American, the former Republican Senate leader and GOP nominee for vice president in 1976 and president in 1996, the honorable Bob Dole, who once explained to reporter Al Hunt, then of The Wall Street Journal, that “poor people don’t make campaign contributions. You might get a different result if there were a ‘Poor PAC’ (political action committee).”
Tax cuts for the wealthiest downsizers and outsourcers are not a jobs program.
— Mark Shields is one of the most widely recognized political commentators in the United States. The former Washington Post editorial columnist appears regularly on CNN, on public television and on radio. Click here to contact him.