Throughout history myths have played an important role in controlling the common folk by the elite and aristocracy, necessitated, of course, by their fewer numbers. Mark Twain noted its use in his book, “Connecticut Yankee at King Arthur’s Court”, observing its effectiveness in controlling the ignorant and uncouth serfs by the Church, the well rewarded agent of the nobility. That myth so widely in use then was, if you work like a feudal slave all day without virtually any pay, starving to death in the process, don’t worry, you will get your reward in heaven: there you will occupy a palace and have everything you had desired (except sex, of course) but were denied on earth. And the general population bought this garbage for nearly two thousand years, confirming the ignorance and gullibility of the general populace to swallow just about anything, including dogma, political propaganda, utter nonsense, or shit.
After Charles Dickens and other humanists let the cat out of the bag, exposing the ungodliness of the Malthus theory and the unchristian treatment of the poor, ironically condoned by the Church for centuries, the rich had to find other myths to keep the rabble slaving away for pennies on the hour. My father believed in that Horatio Alger myth, that if you worked hard here in America, you, too, could become successful and rich. My grandfather and he worked for 12.5 cents per hour. If it were not for FDR and the growth of the unions during the 1930s, my father, like his father, would have died a pauper, too.
When Ronald Reagan—that B actor whom I recall as a child selling soap on TV and who has been canonized as a saint by the Republican Party—spewed that myth which we now term trickle-down economics (aka, tinkle-down, pissed on, economics), the middle class was once again hoodwinked into giving gifts of gold to the rich in hopes of being rewarded with manna from heaven. Of course, that manna never came, since all of that dough resulted in the greatest transfer of wealth over the last 30 years to the upper 1%.
Now that the middle class has finally begun to wisen up to that tinkle-down nonsense, the Republicans and many conservative Democrats have been forced to repackage and disguise that Lauffer myth with a twist: if we give tax cuts to the rich, their tax savings will miraculously create the jobs that we all crave here in America. As the great seer, Yogi, once said, it’s deja vu all over again.
For those of you who actually believe that tax cuts for the rich stimulate the economy and create jobs, historical facts show just the contrary: when the highest marginal tax rates were at their highest rates of 75% to 94% from 1945 through 1980, growth rates in employment were also at their highest rates. And conversely, when the highest marginal tax rates on the rich were at their lowest rates, the rates of growth in employment were also at their lowest rates: over the last eleven years (from 2000 through 2011), the highest effective marginal tax rates have been at nearly historical lows of 35% (in comparison to the 75% to 94% rates in effect from 1945 through 1980), while the capital gains tax rate has been at a historical low of 15%, but the rate of growth in employment has been negative: that is, we have been losing jobs over the last eleven years!
Now, you might wonder, how can that be? Raising taxes on the rich creates jobs in America?! Sean Hannity and Rush Limbaugh say otherwise. Well, folks, it’s quite understandable. When taxes on the rich go down, Congress typically restrains or even cuts government spending, or at least the growth rate in government spending. But you might argue, don’t the rich then invest in America and create jobs?! No, they don’t. The rich typically hoard their money—since they have more than what they could spend in an entire lifetime already—often in tax havens like Swiss bank accounts, the Cayman Islands, Bermuda, etc., or invest their moneys in the stock market, where multinational corporations invest those funds in manufacturing facilities overseas because labor there is as low as 22.5 cents per hour. So jobs are not created here in the U.S. when the highest marginal tax rates on the rich go down. Quite the contrary.
Conversely, when taxes on the rich have been higher, filling Washington’s coffers, government spending typically is increased: for instance, the government funds infrastructure projects, education, the criminal justice system, the space program, the Great Society, endless wars overseas, etc. Such government spending normally creates jobs here in the United States. The fiscal policy of our government can result in job growth; however, a tax policy resulting in lower taxes on the rich does not create jobs in our country since those tax decreases on the rich often result in decreases in government spending, and, consequently, decreases in employment here in the US.
Only significant decreases in taxes on the middle class would result in job creation here at home since the resulting increase in disposable income for a middle class already at its borrowing limit would lead to increased consumption by it, stimulating the economy, and consequently, creating jobs. But the tax decreases proposed by the Republicans and conservative Democrats target the rich, not the middle class. And the rich, unlike the middle class, do not have to spend their additional tax savings. That’s the key point deliberately omitted in the presentation by the messengers of the rich for additional tax breaks for the rich.
Is it any coincidence then that those who give the biggest campaign contributions inevitably get the biggest tax breaks? The United States does indeed have the best tax code that money can buy! Our governmental system is virtually broken beyond repair: campaign contributions are in essence legalized bribery.
Of course, political propaganda always speaks louder than facts to the NASCAR, masochistic mentality of the serfs, who crave simple minded solutions to any problem confronting them. Rest assured, they will eagerly, out of desperation, swallow this myth about how jobs can only be created by lowering taxes on the rich. Such myths have always worked in the past and they are guaranteed to work in the future, especially since the major media, the purveyors of our national myths, are controlled by the very rich themselves.