CBC outreach week
Right now, many of our friends and neighbors are unemployed in an economy that is recovering too slowly, but the solution is not cutting taxes for millionaires while dismantling Medicare, Medicaid, Head Start and SNAP. It’s getting people back to work.
As a former mayor, I know the importance of balancing the budget. The problem is not that we’re broke; it’s that our system is broken. In the last 30 years, our economy has doubled in size, so you’d think the average working family would be twice as comfortable. That hasn’t happened. The pie is getting bigger, but the people cutting it are cutting bigger and bigger slices for themselves.
Republicans argue that these very rich people are the ones who “create” the jobs and therefore taxing them at even slightly higher rates will make them less likely to invest, expand their businesses, and hire more people. According to an article in the Wall Street Journal, over the last two years profits have soared while unemployment has remained disastrously high. All the while, taxes remain at the lowest they’ve been in fifty years. Corporate taxes used to account for 40 percent of all tax dollars. Now it’s just over 5 percent, so it’s hard to argue low taxes correlate to jobs.
Additionally, there is the debate over the relationship between marginal tax rates and overall economic growth. In the past 60 years, job growth has actually been greater in years when the top income tax rate was much higher than it is now. According to a study by the Center for American Progress, in years when the top marginal rate was more than 90 percent, the average annual growth in total payroll employment was 2 percent. In years when the top marginal rate was 35 percent or less—which it is now—employment grew by an average of just 0.4 percent. Pick any threshold. When the marginal tax rate was 50 percent or above, annual employment growth averaged 2.3 percent, and when the rate was under 50, growth was half that.
Saying that we need to maintain hundreds of billions of dollars in tax breaks for the wealthy when Congress is considering devastating cuts to Medicare and Medicaid is not right. Big business already has the money it needs to expand; what it lacks is a reason to expand especially since consumers are still on the fence and the government is slashing spending.
It’s time we start expanding opportunity and stop shrinking the middle class. If working, middle-class people should not take a hit in tough times to pay for tax breaks for millionaires and oil companies. The American Dream used to mean something— that if you put in a hard day’s work, you could expect good wages, benefits, and a better life for your kids. Let’s get back to focusing on our country’s recovery from this downturn and stop focusing on the rhetoric some are using as a scare tactic.