The new Congressional Research Service study on the relationship between taxes and the economy got some attention in David Leonhardt's column last week, and another mention in The Atlantic over the weekend. It also got covered in a Jon Perr diary that didn't draw as much attention as it should have received.
Because this, folks, this should be the end of conservative economics.
Advocates of lower tax rates argue that reduced rates would increase economic growth, increase savings and investment, and increase economic activity... There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little relationship with savings, investment, or productivity growth. However, the top tax rate reductions appear to be associated with increasing the concentration of income at the top of the income distribution.
You hear that? Cutting taxes doesn't lift the economy. It
wrecks the economy by driving up income disparity.
I know that many of you, maybe all of you, believed this all along. I know this isn't the first study to make these connections.
But it should be the last—the last one necessary. Sixty-five years of doing it the Republican way has gutted the American middle class, turned this from the land of opportunity into one of the most rigidly stratified societies in the industrialized world, and converted democracy to oligarchy.
Forty years ago, even many Republicans knew that what now passes for conservative economics was nothing but "voodoo," and that's putting it politely. What happened in the last 65 years doesn't just need to be arrested, it has to be reversed if the country is going to be restored to a sound economic and social footing.