Yesterday, President Obama offered a deficit reduction plan that aims to save $3 trillion over the next 10 years. Half of those funds will be revenue raised from a return to the Clinton administration’s tax rate on those in the top two income tax brackets, as well as the new “Buffett rule” — a minimum tax on those making over $1 million, named after billionaire investor Warren Buffett, who continually notes that he pays less in taxes than middle-class Americans. Heading off the GOP’s new talking point, Obama noted that this tax policy “is not class warfare. It’s math.”
The release of this plan immediately spurred the natural Republican tax apoplexy, with the GOP presidential candidates decrying tax increases as a surefire way to destroy jobs:
MITT ROMNEY: President Obama’s plan to raise taxes will have a crushing impact on economic growth. Higher taxes mean fewer jobs – it’s that simple. This is yet another indication that President Obama has no clue how to bring our economy back.
RICK PERRY: President Obama’s plan is a bait and switch that offers more than a trillion dollars in higher taxes for a promise of temporary tax relief…Worst of all, the Obama plan fails to provide the certainty employers need to create jobs.
MICHELE BACHMANN: Mr. President – you don’t create jobs by increasing taxes on job creators. The President’s plan to raise taxes on the American people is the wrong policy to create economic growth and jobs and shows he doesn’t understand how to turn our economy around…If Warren Buffett believes he doesn’t pay enough taxes, then he should write a check today to the Treasury, but he and the President shouldn’t enact warfare on the millions of small businesses, on charities and on middle class America with increased tax burdens.
RON PAUL:[W]hen the President starts targeting the so-called rich, he’s really targeting small business owners, so ultimately he’s threatening the little guy. The President’s plan, then, will result in a fatal broadside to the national economy from Main Street on down….A $1.5 trillion tax hike will do nothing to help us out of this mess we’re in, and will more than likely create more problems, lead to less investment, and cause more job loss at a time when Americans of all kinds are hurting.
JON HUNTSMAN: President Obama continues to demonstrate that he has no new ideas on how to create American jobs. For two and a half years he’s been peddling a version of the Buffett Tax Hike as a key pillar of his failed attempt to tax and spend and regulate this country to prosperity. That simply hasn’t worked and it won’t work now.
HERMAN CAIN: Here’s what I can tell [Obama] about math: raising taxes on anyone, no matter their income level, will do nothing to stimulate our economy, create jobs or balance our federal budget. Increasing taxes on the private sector will destroy jobs, further damaging our economy and sending even less revenue to the federal government.
NEWT GINGRICH: In the midst of the worst economy since the Great Depression, job creation must be job one for our political leaders. Instead, the president has chosen a path of political gamesmanship and class warfare with a plan that would kill jobs with higher taxes on small businesses and private capital.
Rick Santorum did not release an official statement.
A quick review of the math, however, hollows out what’s left of this GOP talking point. The Center for American Progress’ Michael Linden noted that “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.” He points out that while the top five years of job growth “boast marginal tax rates at 70 percent or higher,” the two worst years were 2008 and 2009 “when the top marginal tax rate was 35 percent.” In fact, “in the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation.”
If math is not these Republicans’ strong suit, perhaps they will fare better with history. The stark difference in tax rates between the Clinton and Bush administrations mirrors the stark difference in job creation. After creating 23.1 million jobs, Clinton pushed unemployment rate down to a 30-year low. Job growth under Bush, however, “was the worst in any cycle in more than 60 years.” His policies led to only 2.6 million jobs created.