IF EVIDENCE MATTERED…. Reports like this one from Bloomberg News are helpful for those who take reason and evidence seriously. If only that were a slightly larger group of people.
Hand the wealthiest Americans a tax cut and history suggests they will save the money rather than spend it.
Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody’s Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell.
The findings may weaken arguments by Republicans and some Democrats in Congress who say allowing the Bush-era tax cuts for the wealthiest Americans to lapse will prompt them to reduce their spending, harming the economy.
Well, this would weaken the argument, if substantiation played a more prominent role in the debate.
This is almost certainly obvious, but it may be worth repeating from time to time: Republicans want lower taxes, especially for the wealthy, in every possible instance. The reasons and circumstances are largely irrelevant. Even in the ongoing debate over President Obama’s middle-class tax cuts, notice that Republicans (and some Democrats who are siding with Republicans) will simply jump from rationale to rationale.
We were initially told we can’t let the lower rates for the wealthy expire on schedule because it would hurt small businesses, except that proved to be untrue. Then we were told the higher rates would undermine economic growth, except that also proved to be untrue, too. Then we were told the higher rates would act as an anti-stimulus, which once again, proved to be untrue.
The point, of course, is that the debate is itself farcical. Republicans started with the conclusion — tax breaks for the wealthy are always inherently good — and are working backwards to justify the answer. One could present iron-clad, irrefutable, incontrovertible evidence that the higher rates would lower the deficit and do no economic harm whatsoever, and it wouldn’t make any difference.
Indeed, look back over the last year and a half. The evidence is overwhelming, for example, that the Recovery Act helped, not hurt, the economy, and every Republican in Congress will tell you the exact opposite. The evidence is undeniable that the Affordable Care Act is not a government-takeover and will actually reduce the deficit, and every Republican in Congress will tell you the exact opposite.
The problem is not with the Bloomberg piece, which is accurate and important. The problem is with an entire political party and its allies who together consider evidence and reason to be inconvenient details better left ignored.
