One of the biggest differences between the President’s tax plan and Mitt Romney’s plan is that Obama ends tax cuts for the wealthy while Romney extends them. Romney’s plan furthers a philosophical mainstay of conservative fiscal policy – the supply-side argument that excess capital for top-income earners spurs employment.
The argument goes like this: Cut corporate taxes and taxes for the wealthy and those recipients are going to use the excess capital to reinvest in their business and hire more people. According to this argument, the wealthy are the job creators.
In fact, our tax policy has been doing exactly this for decades. Taxes for the wealthy have continuously gone down which has resulted in huge profits for top-income earners and corporations.
Below is a graph showing the profits for corporations.
Corporate America is sitting on record profits and the unemployment continues to hover above 8%. In fact, as tax rates have fallen, business have actually shed more and more jobs. Below shows the number American jobs replaced with cheaper labor abroad.
Tax cuts for the wealthy do not create jobs here in America. It’s time to realize that what’s good for corporate America is not always good for Americans.