Exposing the Conservative Lie About Taxes and Job Creation

paul-ryan2All these years Republicans have continued to perpetuate this myth that tax cuts would create jobs.  Never more so than after President Obama was elected.  They warned of the “dire consequences” tax hikes would have on our fragile economy.

Well, let’s look at some of the facts, shall we?

Heading into this past December the talk was all about “the fiscal cliff” and its “impending devastating impact” on our economy if a deal couldn’t be reached.

The biggest obstacle to any deal was of course President Obama insisting on tax hikes for the top 1-2%.  He and fellow Democrats wanted to keep the tax cuts for the bottom 98% of Americans, while rolling tax rates back to late-90’s levels on families making $250,000 or more per year.

You remember the 90’s, right?  When we had historic economic growth, record low unemployment and a balanced budget.

Anyway, a compromise was reached and the threshold for tax hikes was set at $450,000.

While not exactly what most Democrats wanted, it still signaled a tax hike on the very rich—though Republicans still continued to warn of the “dire” consequences these tax hikes would have on our economy and creating jobs.

Unlike Republicans, the actual numbers don’t lie.

January-June 2012 jobs reports before tax hikes:

  • January: 243,000
  • February: 227,000
  • March: 120,000
  • April: 115,000
  • May: 69,000
  • June: 80,000

For a grand total, through 6 months of 2012 (before tax hikes), of 854,000 private sector jobs created.

Now let’s take a look at 2013, after those “job killing tax hikes” were passed:

  • January: 157,000
  • February: 236,000
  • March: 138,000
  • April: 165,000
  • May: 175,000
  • June: 195,000

For a grand total, through 6 months of 2013 (after tax hikes), of 1,066,000 private sector jobs created.

For the mathematically challenged, that’s an increase of 212,000 more jobs created this year than last year at the same point.

Not only that, the month to month comparisons of job creation were higher in every single month but January.

But–but, tax hikes destroy jobs, right?  Well, if  by “destroy” Republicans mean create nearly a quarter million more, then they would be absolutely right.

And these are numbers based on initial reports, I didn’t dig into the revised reports which actually probably added another 10o,000-200,000 jobs to the total created this year.

So while it makes for great rhetoric and political talking points for Republicans to perpetuate this ridiculous lie that “tax cuts destroy jobs”—reality just doesn’t ever support this.

In fact, the decade we had before taxes went up on the richest among us, we experienced the worst recession since the Great Depression—which cost our economy over 12 million jobs.

Not only that, these tax cuts led to a massive growth in our deficits and our national debt.  Tax cuts which President Bush, and the Heritage Foundation, promised would balance our budget in 10 years.

Despite all these indisputable facts, Republicans still cling to, and perpetuate, these myths.  Heck, our economy continues to add jobs every month and they still try and tell the American people that “Obamacare” is costing American jobs.

So, according to these Republicans, tax hikes kill jobs and “Obamacare” kills jobs—yet we continue to create more and more jobs.  A total of 7.2 million in the last 3 years to be exact.

Sometimes I just have to ask myself, “I wonder what reality is like in whatever alternative universe it is where Republicans seem to live?”

Because they sure don’t seem to live in the same reality as the rest of us.

Allen Clifton

Allen Clifton is a native Texan who now lives in the Austin area. He has a degree in Political Science from Sam Houston State University. Allen is a co-founder of Forward Progressives and creator of the popular Right Off A Cliff column and Facebook page. Be sure to follow Allen on Twitter and Facebook, and subscribe to his channel on YouTube as well.

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  • teamrn

    No doubt in my mind that job are being added, no doubt in anyone’s mind. It’s also true that we continue to create/add jobs.. How robust are those those job growth numbers at 212,000 be? Divide that by 50 (states) and you come to 4240 jobs per state and SUDDENLY that figure doesn’t seem nearly as impressive.

    “Yet we continue to create more and more jobs” That’s a fact that can’t be refuted until you realize that the jobs created are from job-sharing, cutting down the workforce to part-time positions (instead of one FTE, why not 2 20 hour positions? That way, we’ll get the work done, but won’t have to pay benefits.

    Those are also jobs that are given to the 25 year old for much less pay than the 50 year old commands because he’s got 4 children. Not because he’s more qualified. What about the experience that the 50 year old brings to the market. I guess President Obama represents the party of cheap labor and age discrimination?

    I ask any of you; have you ever gotten a job from a poor man? Tax that wealthy man who does provide the jobs enough and he’ll depart for friendlier shores and he won’t be providing ANY jobs except to the citizens of New Dehli!

    Even if the wealthy business owner doesn’t put the money he makes back into the business, he’ll buy more goods and services, yachts, cars and keep the wervice provider, yacht-maker or car-maker and dealership in business. But with taxes raised, he won’t have that option, Sure, he’ll learn to live without the LEAR jet, but the maker of the LEAR jet will have one less customer and a lot of one less customers results in less job growth.

    • Bill Dietlin

      YOU HAVE GOT TO BE F*&KING KIDDING. THAT’S YOU DEFENSE. IF YOU TAX THE WEALTHY, THEY WON’T HAVE ENOUGH FOR JETS AND THEREFORE PEOPLE WILL LOSE JOBS. WHAT AN IDIOT.

      • lolsdumbass

        Yeah, I love teamrn’s responses. I don’t ever get to hear people put forth such imbecilic opinions in real life. It takes the anonymity of the internet to squeeze this level of absurdity from someone’s mind and into the public forum. Gotta love a level of debate that makes those who aren’t even mildly interested in the topic, past reading the article, sit up and take notice and say, “WTF?”

      • Lawrence

        Her position is one of logic. Like it or not, money is what makes the world go round. Someone has to make that jet. When people have a surplus, they’re more likely to spend than they would on a tighter budget. Let’s use the already established jet analogy. When more people buy Lear jets, there is what is called a demand. In order to keep up with the demand, the powers that be will be required to have adequate resources (i.e. people, equipment, etc…). This creates a demand for jobs. The demand for equipment creates more jobs for the equipment-makers. This is what is called a market-based economy and it would work much better if the government and labor unions would get their hands out of the till. Every tax or regulation demanded by the government and every benefit or wage increase demanded by the unions is transferred to we, the consumers, via a price hike. This inevitably raises the cost of living and goods which then makes we, the middle and lower classes, poorer and poorer. Then, the federal government, who care so much, raise the minimum wage creating inflation. The burden put on employers is once again transferred to the consumer. So, prices go up, government raises minimum wage, taxes, and increases regulations (don’t get me wrong, i’m all down for clean water), then prices go up again and the cycle is repeated.
        I used to be a socialist like you guys until I saw firsthand what the system does to people. It drains them of any desire to achieve anything. If we want to reform something, lets reform entitlements and ease the presence of government in small business. And, as a culture, you folks have got to stop hating on people for making money. Let him have his dollar, you worry about yours. He wouldn’t be rich in the first place if the lower and middle classes didn’t buy his product or service. If you hate rich people so much burn your corporate clothes, cds, movies, appliances, toiletries, or your whole house for that matter. Just be sure to use a stick and homemade string to start it, not those pesky corporate matches or lighters. Don’t wanna make anyone richer now, do we?
        Face it, rational self-interest is the natural order of things. When you go to buy a CD and your choice is A(Insert style of music you like) or B(Insert style of music you don’t like), you choose the one you like. You don’t say “Artist B has a baby on the way and Artist A has way too much money.” That’s illogical. The market is good. The market makes for freedom. You have the ultimate power of the wallet. Use it.
        This post has gotten waaaaaay off topic and turned into a general rant on Socialism (why don’t you guys just call yourselves Socialists, don’t be ashamed of it.) By the way, you should present a sound rebuttal of Teamrn’s post instead of hurling insults. I highly doubt that you folks could if you tried.

      • Slegato

        Well said Lawrence. And, I find if funny that lolsdumbass talks about the “anonymity of the internet” in their response to someone who has a real profile, pic etc, unlike themselves(or even me for that matter).

    • Robert Johnson

      rich people get rich because poor people! Supply and demand drive the economy not Tax cuts for the rich!! so Teamrn Let do this you live with my dog under my table and you get to live off the crumbs that fall off my plate! so since I got a tax cut I can buy more food for ME to eat and well I think you will get fat too because I spend more on food and eat more food means you will get more crumbs that fall off my plate to the floor! and if you don’t get fatter its all your own fault you are either too lazy or to stupid! that is how your republican party looks at trickle down econ and how you either do or do not get rich

      • Matt

        Robert, I think you could benefit from a freshman level Econ Book. Chapter 2 usually covers how taxes impact supply and demand.

      • suburbancuurmudgeon

        Again, we had higher taxes in the 1990s and a better economy. Explain that one, Mr. Econ 101.

      • Logicalfallacy

        That is simple – the surpluses form the taxes in the 90’s went directly to new programs. The money was squandered by your progressive politicians (and Repubs as well) because they are arrogant and think they can solve the worlds problems with our money. It ends up at defunct places like Solyndra to pay off political favors to Obama. The money is wasted and the natural laws of economics, which progressives hate, took affect, as they will always do, and suddenly the surplus is evaporated and the politicians can’t come back to the tax payers and ask for more because there is nothing to show for it. Take an Econ class – please, we beg of you.

      • suburbancuurmudgeon

        That didn’t explain why we had a great decade. And what’s wrong with new programs if they do some good? And you do realize Romney invested in a green energy company that went belly up.

        The surplus evaporated because Bush cut taxes and then started two wars.

      • Josh

        Sales tax or income tax on the consumers may affect demand, but income tax on the the suppliers will have very little effect on the supply and 0% effect on the demand.

      • Logicalfallacy

        You are so ignorant. You don’t have the opportunity to meet successful businessmen so you will never understand that money taken from them, can’t be used for the business. My suggestion is to become a business owner. Ever wonder why they are mostly conservative?

      • Logicalfallacy

        Matt – pointing out a chapter won’t help. If you don’t believe in the natural laws of economics and hate free-enterprise, no amount of reading will help them. Noble effort though. Imagine if they ever read economics and got to the chapter on determining rates of return and other ratios – their heads would explode. It’s much easier to protest in a tent in a park near Wall St.

      • Robert Johnson

        Matt you need to take that book and try to live by it in the real world with out demand their is no need for a supply! But you are right every business owner I know build so much more product when they get a tax cut and just sits on it till the trickle down makes it to the consumer who might buy it in 5 or 6 years yep so if you really think it works join my dog under the table and see how well it works in reality

      • Logicalfallacy

        Probably the single worst analogy I’ve ever read. Makes no sense at all. How do you explain all the people that have become wealthy by creating and innovating? Their companies create jobs and employ people. They go from middle class to super wealthy all the time. What is this dog under the table eating crumbs crap? May I suggest getting an education and moving out of the anti-wealth cesspool that the Democratic party preaches and relies upon to keep you shackled? You are on their plantation – completely stuck and whole-heatedly buying into their lies so they can remain in power. They really don’t care about you – just need your vote so they can remain in power and avoid the silly programs they invent. Obama has said no to having his family enter Obamacare or the public school system. Buy hypocrisy doesn’t bother progressive minions – they just put the blinders on and continue to be useful morons to the progressive elite.

    • disqus_6AeSbMRBY2

      Ludicrous; give the rich more money to incentivize them. Give the poor LESS money to incentivize them. Most jobs are created by the small business owners, because most businesses, compared to say, Apple, or WalMart or Hewlett Packard, are small. There aren’t enough rich people to buy enough yachts or cars to put the country’s economy right again. And by refusing to look at the REALLY big picture, you are simply adding your voice to those other voices who want to keep the 98% down where they belong, since if they were GOOD people, they’d HAVE money, right?

    • Johnny Warren

      I have heard every one of the statement teamRn made. They are directly out of Hannity’s mouth “Ever get a Job from a poor person” Tax the job creators and they will leave. So leave there will be some other company that will gladly take that market share from them. After all isn’t that the capitalistic and free market way? I am sure all those jests and Yachts will stimulate the economy.

      Teamrn is the epitome of the Teabag Brain.

    • Really? I haven’t heard of any massive layoff announcements from Bombardier? Also, I’d like to add that there is no guarantee that the rich are going to purchase a yacht, a sports car or private jet from an American manufacturer.

      • Skyhollower

        In actuality, it will probably be Italian boat and auto makers, or at least some other European country.

    • Cemetery Girl

      Slightly deluded. You do realize that this process of lay off full time workers and replace them with part time or independent contractors or consultants isn’t exactly new, right? It was a common occurrence prior to the Obama administration. This is how Lear jets and team building trips to tropical locations are still possible when things aren’t going well. Raised taxes, stagnant economy, the choice way of the wealthy and large corporations to tighten their belt is to cut labor costs. For most companies labor costs are the highest expenses. That still doesn’t mean labor should be the primary cut, but labor will be cut before anything that effects the executive level.

    • Logicalfallacy

      TEAMRN: Thanks for your well-educated and factual response. Keep in mind you are on a website that is progressive so facts are responded to by insults. Don’t waste your time. This is the Occupy Wall St. crowd that likes anarchy before educating themselves on economics. They hate the free market, they hate corporations, they hate wealth and want to dictate to you, no force on you, their definition of what is the right amount of wealth. It is a lose-lose proposition. Isn’t it amazing that the OWS crowd is disenfranchised due to their lack of education, initiative, or because they have nose rings and tats that keep them form gainful employment? They are bottom-feeders that want to leach off the tax payers so they can turn around and demonstrate.

    • Yoon-Yun-Thug

      Oh, my God. Are you seriously saying that you would rather protect one wealthy customer for a select few companies than millions of customers for hundreds of thousands of businesses? LEAR might lose a customer? Boo hoo. This whole comment is ridiculous: 4,240 ADDITIONAL jobs per state is actually pretty good, in ADDITION TO all the other jobs that were created. And yeah, we are becoming a culture of part time workers: low hours, low pay, no benefits. Why? Not because businesses and the wealthy are being taxed, that’s for sure. No, it is due to a lengthy and sustained cultural attack via corporate-owned media on unions and worker’s rights. If you have a union fighting for your rights as a worker, you’re more likely to get better hours, better pay, and better benefits, including a retirement package that doesn’t suck.

      The argument that the wealthy are the only ones who create jobs is regurgitated Fox News garbage. This line of rhetoric is used to protect the bank accounts of the super rich. It’s crap, pretty obviously concocted by someone who has never worked as a small business owner, because – guess what – “poor” people are the small business owner’s life blood. Who do think gives plumbers and electricians most of their work? Donald Trump or Ms. Haskins down the road whose water pipes broke because she couldn’t afford to buy heating oil AND her medications under Medicare Part D’s LACK of coverage for the elderly since it has been administrated by private health insurance companies? How are people making money mowing lawns, walking dogs, shoveling rooves, etc, if not for the “poor” people “creating” jobs for others. Honestly, it’s like the work that counts to Republicans is if it makes more than $1 million per year.

      And while I’m about it, corporate owned media is also responsible for this reprehensible trend in people identifying with the plight of the rich man. Media has somehow convinced people that, if you’re watching their program YOU are wealthy. Do you feel wealthy? They try to tell you that, if someone has a TV, microwave, cell phone, car, tattoo, air conditioner, refrigerator, oven, etc… that that person is not, in fact, “poor”… that person is merely “less wealthy” than some other people. You know, I suppose so, when compared to someone stuck in some third world toilet run by dictators, yeah: that person with a free Craigslist TV, mom’s old Honda Civic that barely starts, the appliances that were already in the apartment when they moved into it, the pay-as-you-go cell phone that doesn’t have any minutes on it… yeah those are ALL trappings of the wealthy. Newsflash: none of that means you’re wealthy. At least it shouldn’t in THIS country. But if you can get poor people to blame other poor people for their problems and defend the very people who marginalize and dehumanize you, more power to you, I suppose.

      Lastly, if tax cuts to the wealthy cause the wealthy to create jobs, WHERE THE HELL ARE THE FREAKING JOBS? While getting the largest tax cuts ever under GWB, where were the jobs being created? Not in THIS country. No, the jobs were being created in New Delhi, not New Orleans. And while companies posted record profits, they also got MILLIONS of tax payer dollars in direct payment subsidies. Corporate welfare. Corporations who have bought and paid for our legislators, who post record profits (that’s money AFTER all expenses, including labor costs and taxes, darlin’), are no better than the Mythical Reagan welfare mom, poopin’ out kids to live on other people’s dimes… but instead of kids it’s, you know, BS in DC. A little green grease goes a long way.

  • Susan Lyons Robertson

    My favorite reply from a local business owner when I spent a month querying each one I encountered about how many jobs they could add if their taxes were cut, “Taxes don’t drive my hiring decisions. DEMAND does. If people are buying my product then I can hire. If they cut my taxes though, I’ll take my wife to the Bahamas twice that year instead of once.”

    • Matt

      Susan, take an Econ class. Taxes raise prices, raised prices decrease demand.

      • redheadedfemme

        So you know more about the business than the owner of the business does?

      • suburbancuurmudgeon

        How do taxes raise prices? Why did we have a such a great decade in the 1990s when taxes went up?

      • ThinkGlobal1

        There are a boatload of economic studies that show higher tax rates increasing demand among consumer groups. Consider that taxing the wealthy and using the dollars to fund education and infrastructure projects which boost earnings of the middle class and therefore takes dollars out of millionaires bank accounts and invests it into the middle class consumers who spend at businesses. Nobody said economics was simple, but before you give advice like ‘take an Econ class’ maybe you should take one first.

      • Logicalfallacy

        Take an Econ class. Progressives are always financially uneducated. This article is trying to draw a parallel between two different, unrelated things. The author truly thinks that the tax on the “Super-rich” was immediately transferred to job creation by the federal government? Your examples you use of investing in education an infrastructure are ridiculous since we know the government continues to spend – not invest in the middle class. This is the big progressive lie: Tax the free market and we will distribute the wealth because we can be trusted. The trillions spent on ridding us of poverty has actually increased poverty and reliance. The sooner progressives give up their pipe dream that government is the answer to everything, the better off we’ll be. The soon to be $17 trillion national debt is an earthquake waiting to happen. The problem is both parties continue to spend and spend. There is a universal truth with taxes and it goes like this: Whenever there is a tax, those resources being taxed will flow elsewhere to avoid the tax. Come to Arizona and visit all the corporations that have left progressive CA for tax reasons. Progressives want to control and force people to be taxed at a high rate so they can create their mythical Utopia. When Obama was asked by a reporter if he and his family would use Obamacare, he refused to answer. The same with his private schools. Wake up to the problem.

      • Buddha Bear

        Your tag name says it all – “Logical fallacy”. The USA’s greatest economic growth were thru the 1940’s, 50’s + 60’s when the top tax rate was around 90% (and under Eisenhower 91%). During this time the government built our infrastructure, highways, schools, New Deal programs that proved to do great for the middle class and all classes for that matter. If you did actually take an Econ Class, you will learn that whenever the Top Tax Rate falls below 60%, 3 things will occur: 1) the economy will become UNstable (note US economy’s instability since Reagonomics), 2) economic bubbles will form, 3) those economic bubbles will burst (note W.Bush’s policies – tax cuts + deregulations busted our economy causing the worst depression since the Great Depression. And if you take that Econ Class, you may learn about Horse + Sparrow Theory (Same as Trickle Down economics) which directly led to the Great Depression.

      • Logicalfallacy

        You are so easily misled. This is a popular myth that is easily debunked. The top tax rate is only one feature of our tax system. By itself, which you’ve tried to present here, the top rate tells us nothing about the overall tax burden. When the top rate was 90%, it applied to only 1 percent AGI of individuals with incomes greater than $200,000. In other words, it doesn’t matter how high or low it was since it didn’t have much effect on the economy if it didn’t affect much income. If you want to look at a better indicator, it would be the effective marginal tax rate which has stayed very steady since 1945 (between 19% and 30%). You can’t just take one indicator and try to paint a narrative. In any case, neither of these two indicators really gives you a comprehensive view of the tax burden. That would include every kind of tax (income, sales, property, estate, etc.) collected at every level of government (federal, state and local). Without a more complete measure, it’s impossible to determine how much or little taxes affect the economy.

      • ThinkGlobal1

        But do you admit that the New Deal, and infrastructure development projects that ensued were a major boost to the economy?

      • suburbancuurmudgeon

        What we are saying is:

        1. Tax cuts don’t create jobs
        2. Tax hikes don’t kill jobs.

        Assuming tax hikes create jobs isn’t logical. But then neither are conservatives.

      • ThinkGlobal1

        If the government used the money to fund infrastructure, those dollars would go right back into the pockets of engineers, contractors, equipment suppliers, material suppliers etc. Education is the most important endeavor that humanity does, it is our way of honing intellectual prowess, and progressing as a species. Studies also show that every dollar invested in education is returned plus gains.

      • Susan Lyons Robertson

        LOL Matt – I live in Michigan. In 2010, our Republican legislature cut taxes for businesses by $1.8 bln. They financed that cut by RAISING taxes on retirees, eliminating the Earned Income Tax Credit for the working poor, and eliminating the homeowner property tax credit for middle class homeowners.

        To my knowledge, no consumer has yet reported the joy of finding lower prices for groceries, gas, real estate, automobiles, or any other kind of merchandise. Many of them HAVE, however (myself included) cut back on our spending and put off any large purchases because WE HAVE LESS MONEY IN OUR POCKETS. Unemployment has stayed static.

        How do you explain that, based on your comment?

  • Max Pfingsten

    As John Stewart would put it, they live on bullshit mountain.

  • coconutisland

    Allen, typo near the end, ‘tax cuts destroy jobs” I think you meant “Tax cuts CREATE jobs”?

  • David Lund

    Typo exists in the article:
    “So while it makes for great rhetoric and political talking points for Republicans to perpetuate this ridiculous lie that “tax cuts destroy jobs”—reality just doesn’t ever support this.”
    Should be “tax hikes destroy jobs”. Yes?

  • Rob

    I think there are a lot of different factors here, though. Yes, I agree that increasing taxes on people at the top end of the pay scale will not hurt jobs. But the increase in this tax bracket played only a very small role in the jobs increase. A recovering economy has a lot of factors. The same goes for a failing one. We can do better than these gross generalizations and correlations. The point of this article is correct, but I expect a better argument.

  • El Padrino Sr.

    With all the talk on TV, like CNN and NBC also Facebook and
    other media about their low ratings. How is it that politician don’t learner
    that they are on the wrong track? Do they listen to the news? Don’t they watch TV? Of course beside Fox
    news. And how is it that they continue to get re-elected? Can someone explain
    this to me like I’m a 2 years old?

  • Jen Price

    Realistically the majority of the jobs that have been created in the last 5 years are very low wage, part time jobs that people can’t possibly survive on…
    Plus they want you to have ‘open availability’, which means you can’t decide when you need to work and when you need days off, or even be able to work more than one job to make ends meet and not be homeless.