The stagnant economy is like a stalled car. You sit there and keep turning the key in hopes that it will luckily turn over but you know you’ll have to call the tow truck. House Speaker John Boehner (R-OH) doesn’t want to call the tow truck in issuing his jobs plan called “The House Republican Plan For American’s Job Creators”. The “plan” just offers the same tax cuts, budget cuts, and regulation cuts that have failed yet to create the jobs we need.
In what seems as an effort to pre-empt the President’s jobs speech on Thursday, Speaker Boehner released his jobs plan. It has nothing new and nothing that hasn’t already been tried in the past ten years. It contains nothing for the middle class and those actually out of work.
Increase American competitiveness to spur investment and create more American jobs by
streamlining the tax code and lowering the tax rate for businesses and individuals
including small business owners to no more than 25%.
Reform the tax code to allow American businesses to bring back their overseas profits
without having to pay a tax penalty so they can invest in our economy and create
But the actual facts show that the biggest drag on the economy is the Bush Tax Cuts passed in 2001, extended at the end of 2010, and the two wars we are fighting.
Together with the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years (see Figure 1).
Critics Still Wrong on What’s Driving Deficits in Coming Years
And right now the United States has the 2nd lowest corporate tax rate in the world:
As a share of GDP, the U.S. had the second lowest tax rate, behind only Iceland. This statistic flips on its head the often-repeated Republican charge that America has the second highest corporate tax rate in the world (which is only true on paper). In 2009, U.S. corporate taxes had fallen to only 1.3 percent of GDP, from 4 percent in 1965.
Recently, conservative commentator Bill Kristol chastised his own party for pretending that lowering the corporate tax rate is a cure-all for America’s economic woes. On Fox News Sunday, he interrupted a panelist who again tried to assert the U.S. is suffering from a high corporate tax rate: “Republicans are making a mistake if they focus on big businesses and corporate tax rates. Corporations have a ton of cash. The corporate tax rate is not killing big business in America.”
In fact, one would think that with the current tax cuts and two huge budget cuts we should be swimming in jobs. That’s not the case. The so-called “job creators” are not creating jobs.
The fix for the economy isn’t tax cuts or reducing regulations:
O.K., I know what the usual suspects will say — namely, that fears of regulation and higher taxes are holding businesses back. But this is just a right-wing fantasy. Multiple surveys have shown that lack of demand — a lack that is being exacerbated by government cutbacks — is the overwhelming problem businesses face, with regulation and taxes barely even in the picture.
For example, when McClatchy Newspapers recently canvassed a random selection of small-business owners to find out what was hurting them, not a single one complained about regulation of his or her industry, and few complained much about taxes. And did I mention that profits after taxes, as a share of national income, are at record levels?
So short-run deficits aren’t a problem; lack of demand is, and spending cuts are making things much worse. Maybe it’s time to change course?
And the zero job growth in August even after the debt ceiling deal shows how wrong the Boehner and the Republicans are in their ideas to fix the job problem. We given all the help in the world to the so-called “job creators” over the past ten years and our economic hole gets bigger and bigger.
Stop sitting there in hopes that the engine will turn over. Call the tow truck Speaker Boehner, spend some money and end the Bush Tax Cuts.