Tuesday, September 20, 2011

Lower Taxes on Rich Don't Lead to Job Growth

Ezra Klein presented this graph on the Ed Schulz show this week:


From the site:

"Conservatives have no good explanation for why the economy grew so rapidly in the 1990s despite what they describe as growth-crushing tax rates. The top rates were raised from 28 percent to 31 percent in 1990, and then again to 39.6 percent in 1993—a much steeper rate hike than simply allowing the current 35 percent top rate to revert to 39.6 percent, as President Obama has proposed.

What followed the early 1990s rate increases was an unprecedented economic expansion and a balanced budget. With higher tax rates on both ordinary income and capital gains in effect, business investment was stronger in the 1990s than in the period since the 2001-03 tax cuts. Millions of jobs were created and real incomes grew across the income spectrum. About 18.2 million private-sector jobs were created in the six years after the top tax rate was raised to 39.6 percent in 1993, compared to only 4.7 million private-sector jobs created in the corresponding period after the 2001 Bush tax cuts."

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