In his press conference this morning, John Boehner, to his credit, left open the door for increased revenues. In doing so, he mentioned closing ‘special interest’ tax loop holes. And though some monies are likely to be retrieved through closing such loop-holes, it is impossible to materially deal with the deficit without also increasing taxes as well. To Boehner’s great discredit, in this particular regard, he continues to misinform, repeating the debunked claim that raising taxes on the rich results in lost jobs.
Throughout the Presidential election, President Obama has campaigned on the necessity for letting the Bush tax cuts expire for top earners. Letting the taxes return to Clinton-era tax rates for millionaires would increase government revenues by 650 billion over ten years. Letting tax rates return to Clinton-era levels for those making more than 250,000 per year would increase revenues by 1 trillion over ten years. Much of the American public seems to realize the merits of this position. Thirteen percent of Americans think the Bush Tax Cuts should be allowed to expire in their entirety. Forty seven percent of Americans believe that cuts for top rates should be allowed to expire. This total of 60 percent of the American public compares favorably to the 35% who believes taxes should not be raised at all.
It is likely that even this 35% would have doubts if they realized the flimsy source for Boehner’s false assertion that raising taxes would result in jobs losses. At today’s press conference, Boehner cited a report published by Ernst and Young. The report claimed that letting the Bush Tax Cuts expire for top earners would result in 700,000 jobs losses.
However, this report is in direct contradiction to a report recently published by the Congressional Budget Office. A recent report, which the Republicans forced to be shelved, showed that increasing taxes on the rich had no negative effect on jobs. Even now, the CBO’s position is that raising taxes on the rich would result in, at most, 200,000 jobs lost. However, the added economic stability put in place by moving toward balanced budgets and increasing government revenues reinvested in the US economy would result in more jobs long-term.
Even though the CBO is a non-partisan authority well recognized for its accuracy, the Ernst and Young paper becomes more questionable when one considers the company that produced the report. For one, Ernst and Young is hardly unbiased. It is a large, global corporation operating under an ideology very similar to that of republicans. Unlike the CBO, the company is not non-partisan. Instead it represents its own special interests which are likely in conflict with the interests of the American people.
For these reasons alone, the validity of the Ernst and Young report would be suspect. But Ernst and Young was also involved in the financial crisis in ways that further degrade their degree of trustworthiness. Just before Lehman Brothers collapsed, Ernst and Young submitted an accounting report that professed that Lehman was in a sound financial state. This particular report was so far removed from reality that it has drawn charges of fraud on the part of Ernst and Young who was accused of helping Lehman ‘cook the books.’
Stepping away from the origins of flimsy republican assertions about tax increases harming jobs growth, we have only to look at history to see how invalid repeated republican claims are. Clinton raised taxes and produced the greatest level of jobs growth in decades. Bush cut taxes and jobs growth collapsed. So long as the Bush tax rates have been in effect, US jobs growth has been stagnant or slow. These historical consequences show that a moderate level of increased taxation and re-investment by US government in the American economy is stimulative and results in more jobs overall. This historical proof is in direct contradiction to republican assertions or reports by special interest corporations under suspicion of fraud.