Not everything that comes out of the Republican party is a lie, but much of what the party is built on is based on lies. Here we are, in 2015, and despite both political parties now admitting that we have an issue with income inequality, Republicans are pushing for the exact same policies that made income inequality such a problem to begin with. For the last 30+ years, trickle-down economics has done nothing but made the rich even richer while the rest of the country falls further and further behind.
Republicans are literally advocating for the exact same types of economic policies we saw passed during George W. Bush’s presidency that led to historic income inequality and the worst economic crash since the Great Depression.
It makes absolutely no sense.
Despite the overwhelming evidence that Republican economic policies do nothing but favor the rich, they continue to insist that these same top-down policies are the only way to “save the American dream.” Meanwhile, it’s these types of policies that are killing it.
So I thought I’d go ahead and debunk five of the biggest lies I often hear Republicans tell about the economy.
1. “Tax cuts create jobs!”
This is easily their biggest lie. Job creation comes from one of the simplest aspects of economics: Supply and demand. If demand dictates that a business must create jobs, or else risk losing customers, it’s going to create jobs (supply). However, a business is not going to create jobs they don’t need simply because they got a tax cut. Furthermore, even if a slight tax decrease does lead to a temporary boost in job creation for some companies, those same companies want to see year-to-year revenue increases. Meaning that, unless you’re going to continually cut their taxes every year, they’re going to cut “unnecessary” expenses – which almost always begins with slashing wages and eliminating jobs they feel they don’t need.
Moreover, considering that taxes are still at some of their lowest levels in years (based upon the theory of trickle-down economics) our economy should still be booming. Whenever a Republican talks about a struggling economy and income inequality, all they’re actually doing is admitting that trickle-down economics doesn’t work.
Besides, Bush cut taxes and we all saw how that worked out for the economy.
2. “Corporations are paying the highest tax rate in the world!”
While it’s true our corporate tax rate is high (35-39 percent), what Republicans never mention is what’s called the effective tax rate, which is the actual tax rate a company pays. In the United States, thanks to our many loopholes, the average effective tax rate companies pay is 12.6 percent – not 35-39 percent.
3. “President Obama’s spending has been out of control!”
Actually, under this president deficits have been reduced by over $1 trillion since his first year in office. In fact, the economy almost always does better when a Democrat is in the White House.
4. “Our taxes are too complicated because of our tax rates.”
This is the excuse they use to push for a flat tax, but it’s a complete lie. In this country we only have seven tax rates (10%, 15%, 25%, 28%, 33%, 35%, and 39.6%) – that’s it. What makes our tax system complicated is the litany of ways we define “income” and the seemingly countless amounts of loopholes that exist for people (mostly rich people) to take advantage of.
When Republicans talk about a flat tax, all they’re really doing is trying to trick poor and middle class Americans into supporting a massive tax cut for the wealthy by distracting them with rhetoric about how our progressive tax system is too complicated. The truth is, it’s not our tax rates that are complicated, it’s the loopholes, deductions and the ways we define “income” that are.
5. “President Obama’s economy has led to a decades-low labor participation rate.”
While it’s true that the labor participation rate is at its lowest level in decades, it has nothing to do with President Obama. In fact, it’s just basic math.
First, let’s establish a few facts:
- Our economic crash happened in 2008.
- Americans can receive partial Social Security benefits as early as age 62.
- The “baby boomer” generation is considered anyone born between 1946-1964.
- President Obama assumed office in 2009.
Now that those facts are established, all we have to do is simple math: 2009-62=1947.
In other words, baby boomers are retiring. This isn’t rocket science (or brain surgery for that matter); it’s literally elementary-level arithmetic mixed with a little common sense.
While I clearly didn’t cover all of the lies Republicans tell about the economy, these are five of the most commonly used talking points I’ve seen mentioned most often by the Republican presidential candidates. I’m sure most Republicans coming across this will dismiss these facts as “liberal lies,” but it’s still important to make sure that the truth is out there – even if conservatives continue to choose to believe in fiction.