The kerfluffle swirling around Mitt’s income tax returns reached a fevered pitch this week. The quintessential “Born with a Silver Foot in his Mouth” candidate, Mitt objects to telling America what he’s worth. But he was kind enough to share his effective tax rate with the peasants: 15%. The reason his rate is so insanely low compared to the average American is twofold. First, nearly all his income comes from unearned income; income from investments rather than “the sweat of his brow” like the rest of us schmoes. Paul Krugman teaches us the history.
Defenders of low taxes on the rich mainly make two arguments: that low taxes on capital gains are a time-honored principle, and that they are needed to promote economic growth and job creation. Both claims are false.
Low capital gains taxes date only from 1997, when Mr. Clinton struck a deal with Republicans in Congress in which he cut taxes on the rich in return for creation of the Children’s Health Insurance Program. And today’s ultralow rates — the lowest since the days of Herbert Hoover — date only from 2003, when former President George W. Bush rammed both a tax cut on capital gains and a tax cut on dividends through Congress, something he achieved by exploiting the illusion of triumph in Iraq.
And the economic record certainly doesn’t support the notion that superlow taxes on the superrich are the key to prosperity. During that first Clinton term, when the very rich paid much higher taxes than they do now, the economy added 11.5 million jobs, dwarfing anything achieved even during the good years of the Bush administration.
Once again, the lies we tell ourselves are just that… lies. Lower taxes do not equal prosperity for America. They never have and they never will. Low taxes cause inequality and economic stagnation.
Rich people aren’t “job creators,” they’re greedy bastards who have arranged the world through influence and bribery so they no longer have to pay their fair share.