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Trump and conservatives in Congress are formulation a big taxation cut for millionaires and billionaires. To clear it they’re using the oldest strain in their playbook, claiming taxation cuts on the abounding will drip down to operative families in the form of stronger mercantile growth.
Baloney. Trickle-down economics is a vicious joke. Just demeanour at the evidence:
1. Clinton’s taxation boost on the abounding frequency stalled the economy. In 1993, Bill Clinton lifted taxes on top earners from 31 percent to 39.6 percent. Conservatives likely mercantile disaster. Instead, the economy combined 23 million jobs and the economy grew for 8 true years in what was then the longest enlargement in history. The sovereign bill went into surplus.
2. George W. Bush’s big taxation cuts for the abounding didn’t grow the economy. In 2001and 2003, George W. Bush lowered the top taxation rate to 35 percent while also slicing top rates on collateral gains and dividends. Conservative supply-siders likely an mercantile boom. Instead, the economy hardly grew at all, and then in 2008 it collapsed. Meanwhile, the sovereign necessity ballooned.
3. Obama’s taxation travel on the abounding didn’t delayed the economy. At the finish of 2012, President Obama struck a understanding to revive the 39.6 percent top taxation rate and lift taxation rates on collateral gains and dividends. Once again, supply-side conservatives likely doom. Instead, the economy grew steadily, and the enlargement is still continuing.
4. The Reagan liberation of the early 1980s wasn’t driven by Reagan’s taxation cut. Conservative supply-siders indicate to Ronald Reagan’s 1981 taxation cuts. But the supposed Reagan liberation of the early 1980s was driven by low seductiveness rates and big boost in supervision spending.
5. Kansas cut taxes on the abounding and is a basket case. California lifted them and is thriving. In 2012, Kansas slashed taxes on top earners and business owners, while California lifted taxes on top earners to the top state rate in the nation. Since then, California has had among the strongest mercantile enlargement of any state, while Kansas has depressed behind many other states.
So don’t tumble for supply-side, trickle-down nonsense. Lower taxes on the abounding don’t beget enlargement and jobs. They only make the abounding even richer, at a time of distracted inequality, and they means bigger bill deficits.[*Our interjection to Alexandra Thornton and Seth Hanlon from the Center for American Progress]
Robert B. Reich has served in 3 inhabitant administrations, many recently as secretary of labor under President Bill Clinton. His latest book is “Saving Capitalism: For the Many, Not the Few.” His website is www.robertreich.org.