With discussion in Washington focused on tax cuts, most of which would benefit the very wealthy, it is worth examining the principal argument for reducing taxes on those at the top.
The theory behind “trickle-down” economics is that tax-breaks for corporations and the very wealthy will result in more jobs so everybody will benefit. The reality is quite different. From 1977 – 1980 under President Jimmy Carter, with top marginal tax rate of 70 percent, twice the current rate, there were 159,271 more jobs created per month than eight years under George W. Bush. Under Bush, with the top marginal tax rate hovered between 39.1 percent and 35 percent.
In 1993, when Bill Clinton and a Democratic Congress raised the top marginal tax rate from 31 percent to 39.6 percent, amid loud protestations from Republicans, the next eight years saw more than 23 million jobs added to the economy and a record budget surplus.
Just look at the stock market, have you noticed corporations struggling under the burden of exorbitant taxes?
Corporation’s share of federal tax revenue dropped from 32 percent in 1952 to 10 percent in 2013.
General Electric, Boeing, Verizon and 23 other profitable Fortune 500 firms paid no federal income taxes from 2008 to 2012.
288 big and profitable Fortune 500 corporations paid an average effective federal tax rate of just 19.4 percent from 2008 to 2012.
Profitable corporations paid U.S. income taxes amounting to just 12.6 percent of worldwide income in 2010.
City of Fitchburg