"Kentucky Rep: GOP Belief That Tax Cuts For Rich Spur Economic Growth Is ‘Faith-Based Economics’"
The high-income tax rates expire at the end of the year, part of the so-called “fiscal cliff.” In an interview with ThinkProgress, Yarmuth blasted the GOP claim that letting the high-income cuts expire amounted to a tax hike on “job creators”:
YARMUTH: That’s nonsense, to be quite honest. All you have to do is look at the Bush years when those tax rates were in play and you had one of the worst eras of job creation in modern history. So, that was the whole purpose of cutting those rates back down. But it didn’t create jobs, and there’s really not any evidence that it ever does.
The vast majority of people who are actually hiring and firing, making those decisions, they make those decisions based on whether there’s enough business to justify hiring another person.
It’s a silly argument that’s based on some kind of faith-based economic system that really doesn’t exist in the real world.
Republican supply-side policies (once referred to as “voodoo economics” by then-presidential candidate George H.W. Bush) have indeed failed to generate the job and economic growth the GOP promised. The Bush tax cuts were followed by the worst growth in job creation in more than six decades, as they blew a massive hole in the federal budget. Both jobs and the economy as a whole grew faster under the higher Clinton-era tax rates.
Recent studies have shown that the expiration of the high-end Bush tax cuts would have little or no effect on economic growth, and even some Republicans have admitted that the cuts failed to spur growth at the rates the GOP had promised. Still, the party insists on the preservation of the lower tax rates for the wealthy and has even blocked an extension of the middle-income rates because Democrats refused to extend the high-income cuts too.