Romney Says His Tax Plan Will Create Jobs. Let’s Check the Data.

How to Make Government Work
Aug. 2 2012 4:03 PM

Romney Says His Tax Plan Will Create Jobs. Let’s Check the Data.

149703259
What you hear is the pitter-patter of Romney's trickle-down economic plan

Photo by Justin Sullivan/Getty Images.

Mitt Romney’s economic agenda is a disaster. I am not talking about the distributional effects—how equitable it is. As I wrote yesterday, his plan would sock the middle class with $86 billion in tax increases to subsidize tax breaks for the wealthy.

No, I am talking today just about whether his plan would even work. It won’t.

Advertisement

As explained by his senior adviser Glenn Hubbard, who as chairman of George W. Bush’s Council of Economic Advisers helped bring us the 2008 cataclysm—and made evident in Gov. Romney’s own tax proposal—his idea is old-fashioned, trickle-down economics: Cut tax rates on corporations and the wealthy because doing so, they claim, will increase wages and job creation. That is exactly what the Romney campaign claimed yesterday in response to the Brookings analysis, and what Hubbard and Romney have been saying throughout this campaign. It is the old claim that if only we take care of the “job creators,” all will be well.

OK, Let’s go to the charts.

First, corporate profits are already at an all-time high as a percentage of GDP, higher than before the ’08 cataclysm, higher than EVER!

120802_SPITZ_CHART_CPGDP

Second: Despite this, wages are at an all-time low as a percentage of GDP, having declined almost consistently since the Bush tax cuts were passed in 2001.

Third: Job creation is stagnant at best, with unemployment stuck at 8.2 percent and the work force participation rate, languishing around 58 percent—a level not seen since women entered the workforce in large numbers.

120802_SPITZ_CHART_WGDP

The message is pretty clear: The types of tax policies Gov. Romney is recommending have been tried. They have produced huge corporate profits and skewed income distribution, they have not produced wage growth or jobs.

As President Obama said the other day, we have tried their approach and it has failed. This is no longer an ideological debate. It is matter of simply reading the data we have from past experience. As they say, if you don’t learn from history, you are bound to repeat it.

TODAY IN SLATE

Politics

Don’t Worry, Obama Isn’t Sending U.S. Troops to Fight ISIS

But the next president might. 

IOS 8 Comes Out Today. Do Not Put It on Your iPhone 4S.

Why Greenland’s “Dark Snow” Should Worry You

How Much Should You Loathe NFL Commissioner Roger Goodell?

Here are the facts.

Amazon Is Launching a Serious Run at Apple and Samsung

Television

Slim Pickings at the Network TV Bazaar

Three talented actresses in three terrible shows.

Foreigners

More Than Scottish Pride

Scotland’s referendum isn’t about nationalism. It’s about a system that failed, and a new generation looking to take a chance on itself. 

The Ungodly Horror of Having a Bug Crawl Into Your Ear and Scratch Away at Your Eardrum

We Could Fix Climate Change for Free. Now There’s Just One Thing Holding Us Back.

  News & Politics
Weigel
Sept. 17 2014 7:03 PM Once Again, a Climate Policy Hearing Descends Into Absurdity
  Business
Business Insider
Sept. 17 2014 1:36 PM Nate Silver Versus Princeton Professor: Who Has the Right Models?
  Life
Outward
Sept. 17 2014 6:53 PM LGBTQ Luminaries Honored With MacArthur “Genius” Fellowships
  Double X
The XX Factor
Sept. 17 2014 6:14 PM Today in Gender Gaps: Biking
  Slate Plus
Slate Fare
Sept. 17 2014 9:37 AM Is Slate Too Liberal?  A members-only open thread.
  Arts
Brow Beat
Sept. 17 2014 8:25 PM A New Song and Music Video From Angel Olsen, Indie’s Next Big Thing
  Technology
Future Tense
Sept. 17 2014 9:00 PM Amazon Is Now a Gadget Company
  Health & Science
Jurisprudence
Sept. 17 2014 4:49 PM Schooling the Supreme Court on Rap Music Is it art or a true threat of violence?
  Sports
Sports Nut
Sept. 17 2014 3:51 PM NFL Jerk Watch: Roger Goodell How much should you loathe the pro football commissioner?