Klein spoke basic truth, discoverable by anyone with an internet connection, that what are called "high" marginal tax rates do not discourage economic effort and do not inhibit the hiring of workers, or "job creation," to use the term of art.
KLEIN: It has not seemed to be a discussion particularly amenable to
evidence. But let`s try some anyway. We got a graph from the Center of
American Progress that I brought along tonight.
evidence. But let`s try some anyway. We got a graph from the Center of
American Progress that I brought along tonight.
And what you`ll see on it is -- they did something interesting. They
looked at job creation over periods of time which had different top
marginal tax rates, different top tax rates for the people the Republicans
call the job creators. And what they found, I think, is essentially
destroys this argument. The best years -- the best years for job creation
in this country actually had the highest marginal tax rates.
looked at job creation over periods of time which had different top
marginal tax rates, different top tax rates for the people the Republicans
call the job creators. And what they found, I think, is essentially
destroys this argument. The best years -- the best years for job creation
in this country actually had the highest marginal tax rates.
If you look at the best five years since 1950, you`ll find tax rates
above 70 percent, at the highest rate. And --
above 70 percent, at the highest rate. And --
O`DONNELL: Yes. And the highest bar there is in the 75 percent to 80
percent top tax bracket. That`s when you really saw job creation just
roaring along.
percent top tax bracket. That`s when you really saw job creation just
roaring along.
KLEIN: And that little tiny red line, the little itty bitty one with
the no job creation, that`s where we are now -- very, very low top marginal
rate, very, very low job creation.
the no job creation, that`s where we are now -- very, very low top marginal
rate, very, very low job creation.
And, now, I don`t want to go too far. I think it`s important to say
that we don`t want extremely high marginal tax rates. They do discourage
work. We don`t think taxes are in general a great thing for the economy,
but nor for that matter are spending cuts to things like unemployment
insurance.
that we don`t want extremely high marginal tax rates. They do discourage
work. We don`t think taxes are in general a great thing for the economy,
but nor for that matter are spending cuts to things like unemployment
insurance.
What we tend to find is that taxes are not the driving factor behind
the economy. Republicans have a tendency to make taxes seem monocausal,
the economy is a simple formula. And one end of the formula is taxes. And
when they`re low, the other end of the formula does well, and when they`re
high, it does poorly. That simply is not true.
the economy. Republicans have a tendency to make taxes seem monocausal,
the economy is a simple formula. And one end of the formula is taxes. And
when they`re low, the other end of the formula does well, and when they`re
high, it does poorly. That simply is not true.
O`DONNELL: And these are, by the way, that list that we saw was a
list of the actual legislative tax rates at the time. The reality was that
no one was actually paying those top rates. The reality was even when the
rate was 90 percent, people were in effect paying around 50 percent which
is still much, much, much higher than now. And it had absolutely no
negative impact on job creation.
list of the actual legislative tax rates at the time. The reality was that
no one was actually paying those top rates. The reality was even when the
rate was 90 percent, people were in effect paying around 50 percent which
is still much, much, much higher than now. And it had absolutely no
negative impact on job creation.
Where do we go from here in this debate, Ezra? The -- I was surprised
Republicans today, really, they didn`t come up with any specificity other
than Rick Perry. I got to give him credit. He noticed there was a
limitation on deductibility proposed by the president. So, that would
include deductibility for charitable giving if you gave, you know, $1
million to some charity, you would not get a 35 percent tax deduction on
it, you get a 28 percent tax deduction on it. And that may inhibit some
charitable giving around the edges. That`s possible.
Republicans today, really, they didn`t come up with any specificity other
than Rick Perry. I got to give him credit. He noticed there was a
limitation on deductibility proposed by the president. So, that would
include deductibility for charitable giving if you gave, you know, $1
million to some charity, you would not get a 35 percent tax deduction on
it, you get a 28 percent tax deduction on it. And that may inhibit some
charitable giving around the edges. That`s possible.
Other than that, there wasn`t a word of specificity in their
responses.
responses.
KLEIN: No, not a ton of it. And irony of this conversation is, the
Republicans are going to push it down in the wrong direction.
Republicans are going to push it down in the wrong direction.
If you talk to Republican economists, if you talk to Glenn Hubbard who
is advising Mitt Romney, what he`ll tell you is that the real types of
taxes you got to worry about are marginal rate taxes. You don`t want to
raise marginal rates, it discourages work.
is advising Mitt Romney, what he`ll tell you is that the real types of
taxes you got to worry about are marginal rate taxes. You don`t want to
raise marginal rates, it discourages work.
work. We don`t think taxes are in general a great thing for the economy. . ."
This not 12 seconds after he had stated the verifiable fact that high marginal tax rates do not inhibit effort or cause capitalists to throw up their hands with an Oh-Weary-Me surrender to the rapacity of government as they seek only to create jobs.
Klein compounded his foolishness by citing Glenn Hubbard, the Columbia University economist, as an endorser of his opinions. Hubbard is an adviser to GOP presidential aspirant Mitt Romney, a preacher of a brand of economics regarded by academics as holy writ, but not being taken seriouslyin policy circles. His Wikipedia entry lists his business connections thus: "Hubbard is a member of the Board of Directors of Automatic Data Processing, Inc., BlackRock Closed-End Funds, Capmark Financial Corporation, Duke Realty Corporation, KKR Financial Corporation and Ripplewood Holdings. He is also a Director or Trustee of the Economic Club of New York, Tax Foundation, Resources for the Future, Manhattan Council and Fifth Avenue Presbyterian Church, New York, and a member of the Advisory Board of the National Center on Addiction and Substance Abuse... Director of MetLife and Metropolitan Life Insurance Company since February 2007."
Filmgoers may recall Hubbard's performance as a flack for his financial posse in the movie described on the Wikipedia site.
"Hubbard was interviewed in Charles Ferguson's Oscar-winning documentary film, Inside Job (2010), discussing his advocacy, as chief economic advisor to the Bush Administration, of deregulation, which Ferguson argues led to the 2008 international banking crisis sparked by the collapse of Lehman Brothers and the sale of Merrill Lynch. In the interview, Ferguson asks Hubbard to enumerate the firms from whom he receives outside income as an advisory board member in the context of possible conflict of interest. Hubbard, hitherto cooperative, declines to answer and threatens to end the interview."
So much for MSNBC as a relentless purveyor of liberal dogma.
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