It is difficult to listen to any Republican speak and not here them say something about the all-hailed “job creators”. The job creators, according to the Republicans, are the wealthiest people in our country. This is why Republicans have only one issue they ever talk about and that is cutting taxes for those wealthy job creators. The theory goes back to another love of the Republican Party, Ronald Regan. He developed trickle down economics, which basically argues that if policy is made to benefit upper class citizens their success will trickle down to the other classes and make everyone better off. In today’s political world that has been taken to mean under no circumstance will Republicans ever raise taxes (unless if it’s for the middle or lower class) and they constantly push for tax cuts for the wealthy. If we cut taxes for the rich they will turn around and create jobs. However, that theory just does not hold true when you look at the actual numbers.
What this graph clearly shows is that when the top marginal tax rate is higher there is more job growth. Or in other words when we tax the job creators more then more jobs are actually created. Also a closer look at the graph we see the tax rate of 39.6% created the most jobs in the modern era. This was during Bill Clinton’s Presidency. Then when Bush Jr. became President and lowered that tax rate to 35%, which is still the current rate, we see job growth is absolutely dismal.
Clearly, the numbers do not support trickle down economics and neither does a pragmatic look at the theory. There is nothing inherent about giving rich people more money that will lead to them creating jobs. Individual tax rates do not typically have a bearing on whether a company will hire new people or not. If taxes are cut for the rich they will simply keep that money and increase their own wealth. So it is not a surprise that since Regan began slashing taxes for the rich we have seen a growing income inequality. Cutting taxes for the rich does not create job, it just creates an unfair society.