The lie of the tax holiday

Paul Krugman delivers again.

Commenting on the “new” plan being pushed to have a tax holiday for corporations, Krugman points out that it is again being sold as an answer to our job problems.

Cutting taxes for corporations does not and never has led to more jobs.

The cuts are never really designed for small businesses, and are the worst kind of trickle down wishful thinking.

Krugman:
 

As opponents of this plan point out, we’ve already seen this movie: A similar tax holiday was offered in 2004, with a similar sales pitch. And it was a total failure. Companies did indeed take advantage of the amnesty to move a lot of money back to the United States. But they used that money to pay dividends, pay down debt, buy up other companies, buy back their own stock — pretty much everything except increasing investment and creating jobs. Indeed, there’s no evidence that the 2004 tax holiday did anything at all to stimulate the economy.

A nice piece on what really happens when we cut taxes on corporations, and the disincentive it is for them to invest in infrastructure and employees.

-Chris

Related articles

• Avoiding taxes the way big corporations do it (thehill.com)

The Myth of Reagan

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Having lived through the 1980’s as part of a military family whose father was constantly deployed overseas, the Myth of Reagan has always pissed me off.

Ronnie was not super popular, and was quite often the butt of jokes for his ineptitude. In the military family circles I traveled,  some spoke frankly about who was to blame for the Beirut Marine barracks bombing. That disaster left 299 of our soldiers dead.

Recently, in their constant march toward a revisionist history, the right’s chroniclers of Reagan have tried to erase the god awful state of things The Gipper left for Americans.

Salon’s Steve Kornacki takes the whole fabricated tissue down. Hard:

“Um, yeah, about Ronald Reagan’s Popularity”

[Craig Shirley, a Republican political consultant] pretends there was no “mess” left to clean up, but tell that to George H.W. Bush, who upon taking office had to deal with a Savings and Loan crisis brought on by Reagan’s policies. Bush ultimately authorized a massive, politically toxic bailout — and the crisis has much to do with the recession of 1990 and 1991. There was also the little matter of Iran-Contra, the scheme by which arms were sold to Iran with the profits used to fund an illegal war in Central America, which resulted in the indictment of 14 Reagan administration members, 11 of whom were ultimately convicted (although some of the convictions were later tossed out). Reagan himself was still dealing with that mess after leaving the presidency…And then, of course, there was the national debt, which in the 192 years before Reagan’s presidency had risen to around $1 trillion. But in just eight years under Reagan, it exploded to nearly $3 trillion, thanks to his steep tax cuts, ramped-up defense spending and failure to reduce the size of government. Again, it was left to Bush to try to clean up the mess; hence, Bush’s 1990 decision to raise taxes in an effort to tame the country’s deficits. Like the S&L bailout, this was a deeply unpopular move, especially in light of Bush’s “no new taxes” pledge in 1988, but was — ultimately — one of the reasons America was running surpluses by the end of the 1990s.

Read it. It’s an eye-opener for anyone spoon-fed the hagiographic version of a man who single-handedly ended the Cold War.

As Kornacki notes, Will Bunch has addressed how this legend came about in his terrific book,  Tear Down This Myth: How the Reagan Legacy Has Distorted Our Politics and Haunts Our Future

During the 1990s, the Republican media machine and activist front groups set about revising history.

Schemes were launched to rename everything after Reagan, and a narrative outlining his popularity, folksiness and alleged accomplishments took shape.

It was beautifully orchestrated stagecraft — in keeping with the former actor’s ability to perform a role. And what better role than a better, more popular version of yourself?

The reality is this:

During the Bush re-election campaign of 1992, polling showed The Great Communicator was less popular than Jimmy Carter.

His failed policies had left an enormous mess for the country — one that I would argue America has never recovered from.

Now his acolytes want to continue his policies and take them to new extremes and need to refurbish his image to cover over the natural end result of tax cuts upon tax cuts and removing the protections of government oversight on the banking industry.

Same tired old horse, only more so.

-Chris

Related Articles

• Reagan Aide: 2010 Elections Like 1980 Landslide (politics.usnews.com)