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Taxes And Unemployment

There are some interesting comments circulating today about the Democrat's plans to raise taxes. Citing the work of Cristine Romer (President Obama'a own Chief of the Council of Economic Advisers) The Wall Street Journal notes:

Democrats claim these tax increases on the rich won't do any economic harm. They should read the work of Christina Romer before she became chief White House economist. Ms. Romer and her husband, David Romer, a Berkeley economist, have published multiple studies on the impact of tax policy changes over the past 100 years. One of their findings is that "tax increases appear to have a very large, sustained and highly significant negative impact on output." In other words, tax hikes are an antistimulus.

Mr. Rangel and House Democrats are also banking on the idea that raising tax rates by 20% will raise 20% more tax revenue, but that's like telling Wal-Mart it can raise prices by 20% and get 20% more profit. When taxes on the rich rise, their reported income tends to decline. The last time the top federal income tax rate was 50%, the richest 1% paid only about 25% of all income taxes. Today, at a 35% rate they pay nearly 40%.

Of the more stunningly obtuse fiscal maneuvers by President Obama and the Democrats, massive tax hikes in the middle of a severe recession takes the prize. So consumed are they with zeal to redistribute income, Democrats are substantively killing the goose that lays the golden eggs. This might be riotously funny black comedy except that it's your job at stake. And speaking of jobs, Mort Zuckerman says the economy is even worse than we think:

The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.

The prospects for job creation are equally distressing. The likelihood is that when economic activity picks up, employers will first choose to increase hours for existing workers and bring part-time workers back to full time. Many unemployed workers looking for jobs once the recovery begins will discover that jobs as good as the ones they lost are almost impossible to find because many layoffs have been permanent.

These are facts that should be carefully weighed by voters while Congress considers a list of new taxes.


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Comments (26)

Off topic but wanted to com... (Below threshold)
krkrjak Author Profile Page:

Off topic but wanted to comment on the Sotomayor hearings. Was just listening to that republican embarrassment from SC, senator Graham, pussy footing all around Sotomayor, and the stupid son of a bitch couldn't even quote her "wise latino woman" remark without his notes, which he had to fumble around for. The good people of SC should throw his sorry butt out of office and the sooner the better.

The tax and revenue discuss... (Below threshold)
Oldflyer:

The tax and revenue discussion reminds me of a "truth" I learned while working for failing airlines. To wit: you can have high load factors (fill a high percentage of seats) or you can have high yield (revenue per seat-mile), you can seldom have both. Only the successful manage to balance the two.

Hugh, chum, think you forgo... (Below threshold)
Jay Tea:

Hugh, chum, think you forgot to close off a bold indicator here somewhere...

J.

Lemme see if I can at least... (Below threshold)
Jay Tea:

Lemme see if I can at least partially fix it...

J.

A mangled closing strong... (Below threshold)

A mangled closing strong tag is the problem. ;)

Lemme see if I can help it with this: .

Nope. Oh well. :lol:... (Below threshold)

Nope. Oh well. :lol:

Wow! I was here at the same... (Below threshold)

Wow! I was here at the same time as the famous Mr. Tea and had no idea. Jay, could you please link to where you post now? Thanks.

Sorry, but Barry and Compan... (Below threshold)
GarandFan:

Sorry, but Barry and Company are out to change the world. And the US economy really doesn't concern them other that to provide cover for what they are doing. Matter of fact, the more misery, the more dumb asses are likely to let them do what they want. On the bright side, should they really screw it up and bring the country down, we may yet get to put certain people against the wall. So to speak.

Didn't you guys hear the Ob... (Below threshold)
James H:

Didn't you guys hear the Obama White House has put forward a new tax on closing tags? But because I lean to the left and care about people and fuzzy animals, I'll take the tax and try to close it for you.

Better now?

At this point I hope they s... (Below threshold)
Tim:

At this point I hope they simply do it. I don't think people are going to learn unless the wheels come off and it all goes to hell.

Sorry about the bold.....I ... (Below threshold)
HughS:

Sorry about the bold.....I just type, nobody taught how to drive the damn thing!

Mark RothJay is at... (Below threshold)
HughS:

Mark Roth

Jay is at Commentary" posting under J.G. Thayer.

The complete irony of the D... (Below threshold)
John:

The complete irony of the Democrats and their liberal stupidity is that they intend to crush the very source of revenue they are going to depend on.

Let's go back and remember the railing from the liberals, and some Reps, regarding CEO salaries, bonuses, stock traders, Wall Street, corporations, "the rich". How often did they repeat the same message: Rich are Greedy and Greedy is Evil? How often did they criticize corporations that made profits, employees that received bonuses? All to foment a class war against those that STILL have the potential to join "the rich" and those that already have wealth. The only barrier is the willingness to work for success. Scratch that, Democrats and the Obama Administration are a second barrier to overcome.

Yet only in a liberal mindset is there an equilibrium achieved in removing elements that generate wealth while taxing those deemed to hold wealth? Democrats believe that the rich are their salvation without understanding that if "the rich" cannot continue to generate wealth in this country, they will find another way and location.

Maryland has CLEARLY shown the lame, dangerous, I would also say traitorous, actions of liberals in which they tried to take more from "the rich" only to realize that "the rich" left the state. In Maryland, these same mental giants are now BEGGING for another stimulus, a truly PATHETIC showing for the superior Liberal economic policies.

"Democrats are substanti... (Below threshold)

"Democrats are substantively killing the goose that lays the golden eggs"

they don't care.

the question is being asked more and more frequently:
If Obama and the Dems WANTED to destroy our economy...what would they be doing DIFFERENTLY???

answer: nothing!

It's like this: ... (Below threshold)
wetwillie:

It's like this:

Obama (and his program) are... (Below threshold)
Trajan:

Obama (and his program) are too big to fail.
Obama (and his program) are too big to succeed.

Therein lies the conundrum.

Frankly, when a novice from ChiTown screws it
up this badly, I'm willing to call a spade,
a spade. I'm not a racist.

The Dems look out over a sw... (Below threshold)
Trajan:

The Dems look out over a swimming pool of
taxpayers and see those with their heads
above water, treading water. I guess they
need to harness this energy to drag the
drowners not only out of the pool, but
resuscitate each and every one, prop
each in a chaise-longue and mix a compli-
mentary mai-tai at their own expense. And
by all means, invite them to jump back
into the pool whenever they desire. Insanity.

Rangel, of all people, shou... (Below threshold)
Trajan:

Rangel, of all people, should chair this
committee. This piker should be "doing
time" and the main reason he's not is the
main reason Obama is your president. A
black politician is immune to normal law.
OJ is innocent. Michelle is the most
beautiful first lady ever. Jackson was
"normal". Al Sharpton must have a microphone
whenever he wants one. Louis Farrakhan is
more mainstream than Dick Cheney. Sen. Burris
is paying for Rod's sins.

Minor correction of WSJ: Ro... (Below threshold)
jpe:

Minor correction of WSJ: Romer's paper found that taxes to raise funds for new initiatives slowed growth, while tax hikes that would reduce the deficit (such as Clinton's) actually helped the economy and spurred growth.

Why are racists tolerated o... (Below threshold)
Second to Nun:

Why are racists tolerated on this blog? Trajan has clearly made racist remarks.

Gee, Second to Nun, I don't... (Below threshold)
A Concerned Troll:

Gee, Second to Nun, I don't know why racists like you are allowed to post here, either.

Raising taxes is not a "DEM... (Below threshold)
914:

Raising taxes is not a "DEMOCRATIC PLAN".... Its a way of life,.

2nd to everyoneI s... (Below threshold)
914:

2nd to everyone

I see nothing racist in Trajans comments? Who are You? Screwy Louie Fara com?

A friend sent this via emai... (Below threshold)
Stormin:

A friend sent this via email and boy does it hold true ....

An economics professor at a local college made a statement that he had never failed a single student before,
but had once failed an entire class.

--------------------------------------------

That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer.


The professor then said, "OK,
we will have an experiment in this class on Obama's plan".


All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A.


After the first test, the grades were averaged and everyone got a B.
The students who studied hard were upset and the students who studied little were happy.


As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.
The second test average was a D!
No one was happy.


When the 3rd test rolled around, the average was an F.

The scores never increased as bickering,
blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.


All failed, to their great surprise, and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great but when government takes all the reward away, no one will try or want to succeed.


Could not be any simpler than that.


If somebody is unable to understand THIS explanation, I have serious doubts about their ability to even function in society, much less run our country!

As the late Adrian Rogers said, "you cannot multiply wealth by dividing it.."

What's your point STN.... (Below threshold)

What's your point STN.

STN could not be reached 4 ... (Below threshold)
914:

STN could not be reached 4 comment; So instead He used Me as a blogiffer decipherer..

I am a true Byrd originalist. Trajan cannot speak the truth.. Oj is innocent, Michelle is pretty and other falsehoods I proclaim as truth must be viewed at thru the prism of a piece of charcoal glass.




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