Once again the Republicans have it all wrong. They say we should cut the top marginal tax rate in order to spur economic growth and create jobs. Turns out they have it, not just wrong but backwards. We should raise the top marginal rate.
You hear them just about every day. Some Republican is out there proclaiming that all we really need do, the one thing we must do, the thing we just have to do, is to lower those awful top marginal tax rates and job creation will just explode. My goodness, it sounds so easy. Just let the rich folks keep more of their money and they will go out there and invest like mad and the economy will grow and grow and grow and grow and we will be awash in jobs.
Well, you’ve heard it over and over. But, is that true? Do lower top marginal rates lead to economic growth? Sorrow, once again the Republicans have got it all wrong.
Take a look at this chart from the Center for American Progress comparing the average annual growth in real gross domestic product under different top marginal tax rates. If the Repubs are right then GDP should have grown at a much faster pace during periods when the top marginal rate was low and slowed to a crawl when the top marginal rate was high. Is that what happened? Nope. In fact, if you just looked at the historical record and you wanted to spur economic growth, you wouldn’t cut the top marginal rate like the Republicans say; you would instead INCREASE the top marginal rate.