Heritage Foundation economist Stephen Moore’s claim that there’s a “vital link between low taxes and jobs” is, dare I say, laughable. When the stock market crashed in 1929, triggering the Great Depression, the top marginal tax rate at 24 percent was the lowest it had been since 1916. Although unemployment remained very high throughout the next decade, the percentage of unemployed Americans peaked at more than 20 percent just before Franklin Delano Roosevelt took office and boosted the top tax rate to 63 percent. It was bumped up to 79 percent in 1936, but unemployment continued to drop steadily.
The 1950s are rightly remembered as a time of broad-based prosperity with good middle-class jobs available for most. The top marginal tax rate during that decade never dropped below 91 percent. More recently, presidents George H.W. Bush, Clinton and Obama saw employment surge in the wake of income tax hikes on the rich.
In contrast, the “Great Recession” of 2008 occurred after President George W. Bush had cut top tax rates twice and when taxes on dividends and capital gains were the lowest since the Great Depression.
Despite conservative claims to the contrary, it simply isn’t true that soaking the rich leaves us all wet.
Hal Ginsberg, Kensington