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James Heffernan

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Mr. Speaker, You're Dead Wrong About Taxes and Jobs

Posted: 09/16/11 02:36 PM ET

"Tax increases destroy jobs."

So said House Speaker John Boehner in a speech on Thursday to the Economic Club of Washington, denouncing President Obama's jobs bill because it would raise taxes on the "job-creating" rich.

Mr. Boehner did not tell us how many jobs have been created in the past year by this grossly undertaxed sliver of our population. Nor did he say anything about what happened the last time Congress raised our taxes.

In the Omnibus Budget Reconciliation Act of 1993, a Democratic-majority Congress raised taxes on top wage earners, corporations, Social Security benefits, and transportation fuels, and lifted the cap on Medicare taxes. Not a single Republican in the House or Senate voted for the Act, which President Clinton signed on August 10.

And guess what happened?

Between the date of the signing and the end of Clinton's second term, more than 21 million jobs were CREATED. Whether or not these jobs grew out of the tax increases or rose up in spite of them is a question debated by those on the right and the left. But no one can deny this simple fact: the largest tax increase in American history was followed by one of the most extraordinary periods of job growth we've ever seen. So when the Speaker of the House claims that tax increases destroy jobs, he's talking through his hat.

This is just one reason why I continue to support President Obama. Though it is safe to predict that House Republicans will never pass his Jobs Bill, I believe he can run on it next year. When 14 million people are out of work and more than 46 million are mired in poverty, how many voters really believe that the wealthiest among us simply cannot be asked to pay their fair share of taxes? Not even to pay for things we desperately need -- such as extending unemployment benefits, cutting payroll taxes for businesses and typical American workers, giving tax credits to employers who hire veterans and the long-term unemployed, keeping police, teachers, and firefighters on the job, repairing and modernizing some 35,000 public schools, and putting hundreds of thousands of workers back on the job rebuilding the roads, rails, bridges, and airports that businesses cannot run without?

Next fall, how many voters will believe that we must sacrifice all these benefits on the altar of NO: no tax increases on the so-called "job-creating" rich? Mr. Speaker, the rich won't create jobs until consumers start demanding more goods and services. And that demand won't come without the kind of action exemplified by the American Jobs Bill.

Opposition to this bill springs, of course, from the same mindset that has lately defined the Federal government as the number one Enemy of the People. Texas Governor Rick Perry, for instance, is running for president on a pledge to "make Washington, D.C. as inconsequential as possible in our lives." But since February 2009, businesses and government agencies in Texas have received more than 17 billion FEDERAL dollars from the American Recovery and Reinvestment Act, and when fierce wildfires swept the state last spring, guess who begged the president for an emergency declaration that would bring more federal resources and dollars to the state? ( In response to Governor Perry's urgent request, the president made the declaration.)

It's fascinating to see what emergencies do to state governors, regardless of which party they belong to or what they think about government spending. When Hurricane Irene brought floods to New Jersey, Governor Chris Christie, a darling of the Republican right (which would dearly love to see him run for president), could hardly wait for FEMA funds and would not tolerate any delays in the name of budget-balancing, such as the offsetting cuts in federal spending demanded by House Majority Leader Eric Cantor. At a news conference on September 1, here's what Christie said of Cantor's demand: "You're going to turn it into a fiasco like that debt-limit thing where you're fighting with each other for eight or nine weeks and you expect the citizens of my state to wait? They're not gonna wait, and I'm going to fight to make sure that they don't. I don't want to hear about the fact that offsetting budget cuts have to come first before New Jersey citizens are taken care of."

Listen, folks: that's a REPUBLICAN governor asking the federal government to take care of his people. Without wrangling over spending cuts.

How many more fires, hurricanes, and economic disasters do we need before we can all recognize that the federal government is absolutely vital to the survival of this country? And can we afford to vote for anyone who simply wants the government to get out of our way, or who doesn't believe that every one of us should pay our fair share to support it?

These will be central questions in the coming elections.

 
 
 
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08:46 AM on 09/19/2011
"TAX INCREASES DESTROY JOBS." The media allows this lie to ferment in the fermented minds of the American electorate. John Boehner has that glazed look in his eye that belies a man about to lose his job.
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kamact
Market Observer
06:32 AM on 09/19/2011
The GOPers are masters of misinformation,...and driven to create Corperica a country for the corporate elite, theTBTF , and the rest of the top 2%, who all benefit from tax loop holes and low tax rates, and deregulation.
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SeattlePepe
Lean right but sometimes look left
11:32 PM on 09/18/2011
This progressive chorous of "fair share" has become so dull.
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DocturT
The rich are too poor.
12:08 AM on 09/19/2011
Well don't worry about it and go back to your martini sweetie.
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SeattlePepe
Lean right but sometimes look left
10:34 AM on 09/19/2011
Clever, very clever. Nah, I've actually got work. You're welcome for the handout myself and other earners provided you.
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wespenn56
Conservative does start with "CON"
10:15 AM on 09/19/2011
Not nearly as dull as the lie "tax increases kill jobs". Since the Bush tax cuts went into effect, where is this plethora of jobs it was to supply?
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Charles Gray
The Big-O, self proclaimed Underdog!
09:43 PM on 09/18/2011
The free market determines when jobs will start increasing. It will be a long and reletively slow process because of the economic malaise we have brought on ourselves. The best judge of when to hire are the people who actually have the most skin in the game. That would be the EEEEEEEvil Rich you whine about. As for the FEMA and like remarks you made: the federal Gov. has a roll in our lives. It is spelled out in the Constitution. Even the most staunch Conservative doesn't hate the Federal Gov or want to eliminate it. Just bring it back to a sensible level by obeying the law of the land-the Constitution. As for "fair share"? Fair according to whose rule book? Government is not that smart, so please...leave the economy to the experts, punish those who break the rules and keep your damn hands off my red-white-and blue assets. We will certainly be all the better for it.
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Charles Gray
The Big-O, self proclaimed Underdog!
09:43 PM on 09/18/2011
No one who has any liquidity wants to take the higher risks that exist today because of Barney and Friends and the Big-O's give-aways. And...yes...the over-spending of W as well. Remember-like it or not, Big Brother does not "own" the jobs...yet. I know...there are those who rabidly await the day that they can get all of us by the short hairs by controlling jobs. Right now they are determined to exist or not by the very businesses that create them...or not. The accompanying risks in the economy, the loan rates, the viability of the product and many other factors determine if anyone wants to hire. Sorry, all you camouflaged socialists, but the jobs do not nor have they ever belonged to Big-G. To think that the economy today, especially in light of the national debt, can be accurately compared to the Slick Willy years is ludicrous. Taxpayer dollars for anything just increases the debt for future generations unless you increase taxes now or defund A so you can fund B.. Tax increases will slow spending, decrease jobs, etc. It is a vicious circle when Big-G tries to effect the sensitive balance in the market today. We have never had this much debt. We are in new territory. Old ideas may not work.
08:07 PM on 09/18/2011
55 person company is going to be hit with a $2000-$3000 per head tax, per Obamacare.

So they're going to cut 6 jobs and any new hires will be part time workers.

Way to go, Obama!

And way not to see how tax hikes cost jobs.
09:43 PM on 09/18/2011
If there is a market for that product, and the demand can't be met with 49 jobs, those 6 workers won't be fired, the owner will suck it up and find a way to pay for it. Why? Because if one company isn't meeting demand by producing an appropriate supply of products, someone else will, and soon enough, that first company will be out of business. That is what happens in a market economy.
10:02 PM on 09/18/2011
You hope.

Hawaii implemented a similar health care plan. The companies simply pay people cash, have them work 39 hours per week (40 hour employees qualify), etc. They still got their "product" to market just fine.

Oh yeah, many of those people getting cash were union workers, and they preferred the cash over W2 or 1099 wages.

Go figure.
09:36 AM on 09/19/2011
That 55 person Company will do just fine just like in the Clinton years and Big Corps will be fine as well, so please cut it out smh OBAMA 2012 YES!!!
10:29 AM on 09/19/2011
The 55 person Company will be a 49 person company.
07:04 PM on 09/18/2011
I would like to see Boehners proof that the job creators are the wealthy. The Republicans keep using this lie but have never backed up this fairy tale. Let's put them to task on this "assumption" and demand proof. E-mail, phone, write to your representative and tell them you want this fairy tale to be proven for what it is: A FAIRY TALE.
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10:57 PM on 09/18/2011
President Obama has stated many times in the last year that raising taxes kills jobs and last December when President Obama passed the extension of the Bush taxes cuts, that those tax cuts would create jobs. It would have worked if he did not give in to the looney left and start the class warfare about raising taxes on people who make over $250,000...... so now no one knows what their tax bill will be in the future.
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TheIndependenceParty
Cranky yankee and a rehabilitated ex-Republican
10:54 AM on 09/19/2011
There is no evidence of any kind that lowering taxes creates a single job! Case in point the abysmal job rate during Bush's 2 terms. Nada, zip, nil.

Sorry, ... but that ship sailed a long time ago. Time to raise them!
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Dh Barr
Bringing Clues to the Clueless
04:07 PM on 09/18/2011
"Though it is safe to predict that House Republicans will never pass his Jobs Bill, I believe he can run on it next year." -- don't worry, so does he. That is why he is proposing a bill that he knows will never pass - not to create jobs, but to give him someone to blame in the leadup to the election.
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tnkeating
Dyslexic agnostic insomniac
03:29 PM on 09/18/2011
Look James what you propose is that the rich pay an unfair share, the top 1% already pay 30% of the taxes in this country, Fact is only 51% of the people in this country pay the taxes that cover everybody else that doesn't pay tax. You could tax everybody 100% of everything they earn over 200,000 and it would only pay this countries bills for 132 days, that leaves 233 days left to pay for. Who do we tax for that? This country collected 700 billion more in revenue in 2010 that it did in 2009, we don't have a revenue problem, we have a spending problem.
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GoodbyeRubyTuesday
Daring Denouncer of Dominionists
07:26 PM on 09/18/2011
We have a revenue problem.
The 50% who don't pay FEDERAL INCOME TAX:
22% are older individuals, 15% are working families with tax credits and 13% are higher-income earners who have lots of deductions.
http://www­.thefiscal­times.com/­Articles/2­011/08/31/­Who-Pays-N­o-Taxes-an­d-Why-They­re-No-Pot-­of-Gold.as­px”
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TheIndependenceParty
Cranky yankee and a rehabilitated ex-Republican
10:55 AM on 09/19/2011
1 out of 6 Americans lives in Poverty. You would raise that to 1 in 3!
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den1953
The best politicians are for free!
12:59 PM on 09/18/2011
It is very hard for a Republican to admit they are the wealthy, but it never stops them from taking advantage of the perks that come with that position after all they never had to go without anything!
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mrose001
VOTE 2012 for a change that will ROCK Washing
11:18 AM on 09/18/2011
Mr. Heffernan's assessment of Boehner's defense of taxes on the wealthy is absolutely correct. It would be refreshing to hear something new out of the GOP and Boehner besides defense of lower taxes which only created wealth and jobs overseas.

In order to stimulate the economy, and to stop the stagnant growth, we have to invest in America by putting American's to work. Work in the areas we have the greatest need right now, infrastructure, education, research and development etc. Obviously to create the jobs require spending and investment in America, and requires funding from increased revenue streams, with spending cuts for wasteful programs such as war, foreign aid to our enemies. Not an easy task for any group, however the GOP's refusal to do anything or allow tax revision is not the answer.

Americans' must get involved and push Congress to act now, stop the rhetoric we are tired of hearing. Their dysfunction and refusal to move this country forward because of their sick mandate against the President has hurt us long enough. Vote carefully in 2012, the best we can do is send a message to Congress that will not be forgotten, vote most of them out!
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den1953
The best politicians are for free!
01:02 PM on 09/18/2011
It just shows how confused the American people can be come election time they bought that jobs line form the Republican Party hook line and sinker, once you elect them you are stuck with them, it isn't like buying something from WalMart you can't take a lying politician back to where they came from.......F&F
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tnkeating
Dyslexic agnostic insomniac
05:59 PM on 09/18/2011
What created jobs overseas is the highest corporate tax rate in the world, these corporations are responsible to their share holders and can make a greater profit in countries with lower tax rates and sometimes cheaper labor. You have some valid ideas about foreign aid to our enemies and perhaps wars, aside from the fact that millions are employed in this country that their jobs support the war effort. I don't believe the revenue should come from taxes, if you have a good idea and you can sell it, by all means build it, but with your money. No risk, no gain. Passing the Fairtax would revolutionize the tax system, only what you spend is taxed and you take home your entire paycheck. I can promise you I won't be voting for Obama again.
07:10 PM on 09/18/2011
The Corporate tax rates we hear about all the time are another fairy tale by the Republicans. Seventy eight percent (78%) of all American Corporations pay zero (0%) in taxes and the remaining pay on average just 7%. To add insult to injury, we have 178 Corporations that have negative tax rates for the next 5 years. Check out the GAO to see for yourself. In other words, it's all a great big lie. The only way to stop the migration of American jobs is to legislate high import fees and buy only American made goods made on American soil. The Republican rhetoric is so outrageously stupid it makes one ill to hear that same mantra over and over.
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TheIndependenceParty
Cranky yankee and a rehabilitated ex-Republican
10:59 AM on 09/19/2011
" ... sometimes cheaper labor"?!!!

Always Cheaper Labor. Corporate taxes mean nothing, ... for most corporations don't pay any!
gravityhunter
Lock, wave n pull
03:06 AM on 09/18/2011
I concur, I see no jobs being currently created......
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tutorintoledo
Conservative AND Liberal. Depends on the issue!
02:33 AM on 09/18/2011
You know... I wish that the Republican run house would simply introduce a tax increase on the rich (as only the house can do it - no matter the bluster Obama makes). It could be a mild one - and the Democrats would jump on it. In doing so they would lose their one and only talking point.

Take away 'millionairs, billionaires, and corporate jets' from Obama, and all he's left with is 'I, I, I'.
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stingjim
Conservative
01:21 AM on 09/18/2011
Lower tax rates increase the incentives for production by allowing producers to keep more of what they produce. Deregulation increases incentives for production by reducing the costs of production, increasing the resulting reward. Restrained, anti-inflation monetary policy expands the incentives for investment to increase production because investors know the value of their investment will not be depreciated by inflation and a declining dollar. Reduced government spending and deficits reduce the government drain on private-sector investment funds.
The central fallacy behind the Obama/Keynesian economics is that the money for the increased government spending and deficits has to come from somewhere. If the government borrows a trillion dollars out of the private sector to spend a trillion back into the private sector, it hasn’t done anything to increase the economy on net. If it seizes a trillion dollars in taxes out of the private sector to finance the trillion of increased spending, the result is worse. The economy has not been expanded on net, and the increased taxes reduce the incentives for production, resulting in a net loss to the economy.
Keynesian economics survives not as a matter of logic, but because it provides cover for what the politicians want to do: increase spending and deficits to buy votes for their political machines. For a Chicago machine politician like Barack Obama,
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Charles Gray
The Big-O, self proclaimed Underdog!
01:50 AM on 09/18/2011
Well said and straight forward. I only have one criticism. In the HuffPo environment and considering the typical blogger here you need to change a little. If you really want to reach those who need it most: Use a font that looks a lot more like crayon. When talking about numbers most do not understand the difference between millions, billions and trillions. Not sure what to do about that one. Maybe equating it to so many pounds of Gummi Bears. Divide your remarks into smaller pieces so they can have recess in between. And, lastly, pause for potty breaks and, for goodness sake, never let them miss their daily ration of Kool-Aid. Thanks-just trying to help.
gravityhunter
Lock, wave n pull
03:10 AM on 09/18/2011
Yikes...
01:28 PM on 09/18/2011
These are all very good ideas. I think everyone here can agree that the conservative approach to economics would be better written in crayon, and who doesn't like Kool-aid? In truth I can think of no better arena to discuss conservative economic policy than the playground at recess. I cannot convey to you the scale of your discovery, tomes shall be written. You sir have found a place where conservative principles finally feel appropriate. Thank you. Your help was much appreciated.
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seanny53
Things fall apart, the center cannot hold
01:03 PM on 09/18/2011
Yet a lack of demand will ensure that an increase in production will not take place. Supply side doesn't work. If you don't like New Keynesianism you need to find a better solution not the same old supply side nostrums.
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Steven Biggs
11:35 PM on 09/17/2011
MR. HEFERNAN, YOUR DEAD WRONG ABOUT TAXES AND JOBS................It's not that we conserv's don't want everyone to pay their fair share of taxes. It's that the government needs to back off on the spending and stop wasting it. How many billions dod Obama waste on his stimulus package? It is just now coming to lite. If they were to do that then we would discuss tax raises. The Lib's just want to raise taxes without any accountability. Just hand it over blindly to people that coud never make it in the buisness world. Until then............say no to raising "any" more taxes!
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RUKidding0
Freedom is Fundamental
12:07 AM on 09/18/2011
# 12
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Steven Biggs
09:46 PM on 09/18/2011
#12....?
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HUFFPOST COMMUNITY MODERATOR
HotelDrama
01:01 AM on 09/18/2011
And how many trillions did Bush waste on his wars? And how many conservatives were up in arms over that? And where was/is the accountability over that? Seems entirely selective, don't you think?
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MDhome
life is a paradox
01:18 AM on 09/18/2011
war spending good, social spending bad, conservatives mantra.
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Steven Biggs
09:50 PM on 09/18/2011
See....our minds are thinking alike!!! Bush was waaaay to liberal thinking. He spent like it was going out of style. See what happens when you grow government and spend like a fool.............messed us up real good!