New Study Finds High-Income Tax Cuts Don’t Stimulate Economic Growth

By Travis Waldron/Think Progress

Congressional Republicans and their party’s presidential nominee have both pushed plans to cut taxes on the wealthiest Americans in hopes that such a move would stimulate the economy and aid the recovery from the Great Recession. A new study, however, indicates that tax cuts for the wealthiest earners fail to generate economic growth at the same pace as tax cuts aimed at low- and middle-income earners.

The study, conducted by Owen M. Zidar, a former staff economist on President Obama’s Council of Economic Advisers and a graduate student at California-Berkeley, examined economic growth in the states with the most high-income earners. Zidar reasoned that “states with a large share of high income taxpayers should grow faster following a tax cut for high income earners” if the tax cuts had the economic effect conservatives claim.

What he found, though, is that the effect of tax cuts for the rich was “insignificant statistically,” as Reuters’ David Cay Johnston reported:

“Almost all of the stimulative effect of tax cuts,” Zidar found, “results from tax cuts for the bottom 90%. A one percent of GDP tax cut for the bottom 90% results in 2.7 percentage points of GDP growth over a two-year period. The corresponding estimate for the top 10% is 0.13 percentage points and is insignificant statistically.”

Zidar’s study provides more empirical backing to what the U.S. has experienced over the last 30 years. Supply-side tax cutting policies have not led to the growth their Republican proponents promised. The Bush tax cuts, for instance, were followed by the weakest decade for economic expansion on record.

Still, Republicans, some of whom admit that the Bush tax cuts didn’t lead to the desired growth, are sticking to their ideology. Republican presidential nominee Mitt Romney proposed a tax cut that is four times larger than the Bush tax cuts; the GOP has fought efforts to allow the high-income tax cuts expire at the end of the year, arguing that doing so would dampen growth; and Republican governors across the country have pushed tax cut packages aimed at the wealthy even as their states struggle with budget shortfalls.

Paul Mr. Serious Ryan Has Put Congressional GOP in Serious Trouble

 By Evil Sax/Diary of a Republican Hater:

Today in Iowa, the most serious man in America, Paul Ryan, was heckled. 

     Do these unwashed Iowans know who Paul Ryan is? He's the most serious man in America and also the boldest. Yet they seemed not so impressed:

    "Paul Ryan’s first solo campaign trip since joining the Republican presidential ticket was a little like baptism by fire, as he was heckled at the state fair’s legendary soapbox."

    "There was no easing into things with a tightly controlled campaign event like the ones typically held by Mitt Romney. Instead, Ryan was dispatched to the Des Moines Register’s soapbox here at the Iowa State Fair, a site where heckling is almost always expected, and where Romney himself last year had a terse exchange with an attendee over Medicare and Social Security, and made the infamous claim that “corporations are people.”

   Read more:http://www.politico.com/news/stories/0812/79679.html#ixzz23SuQfLyP

   Maybe that's why Romney split up from Ryan-he's been booed and heckled enough. Indeed, this was the same place Mitt Romney had declared  "Corporations are people, my friend."

   I guess they don't like serious in Iowa. They do, however, like their Medicare. While conservatives are claiming that this is going to force the President to discuss issues, it's interesting that Mr. Serious has already been directed by the Romney campaign not to use the phrase "entitlement reform at all."

    "It only took two hours after the Paul Ryan vice presidential announcement for Republican congressional candidates to get their talking points on how to spin the Ryan budget and Medicare attacks."

    “Do not say: ‘entitlement reform,’ ‘privatization,’ ‘every option is on the table,’” the National Republican Congressional Committee said in an email memo. “Do say: ‘strengthen,’ ‘secure,’ ‘save,’ ‘preserve, ‘protect.’”

   "The email read like a warning shot, alerting Republicans that they would soon face a barrage of Medicare-themed attacks and telling them they needed to be ready for the scrutiny that was to come. The internal email, obtained by POLITICO, was a clear and immediate sign that Republicans knew Ryan could create trouble down ballot for GOP candidates in tight congressional races."

    “Predictably,” the NRCC wrote, Democrats are “already blasting Mitt Romney’s selection of Congressman Paul Ryan as his vice presidential running mate. Expect your boss to get questions from reporters on how this selection of a fellow House member impacts your race.”

     "The memo — the first of at least a half-dozen the NRCC has sent out to campaigns since the Ryan pick was made public that have been obtained by POLITICO — sheds light on the lengths to which Republicans are going to coach their members and candidates to navigate Democratic efforts to tie them to Ryan and his controversial plan to rewrite entitlement laws."

    "While Republicans insist they aren’t panicking over the Ryan-centered assault, they also acknowledge that their effectiveness in pushing back will play a large role in determining their success in defending their House majority."

   Read more:http://www.politico.com/news/stories/0812/79673.html#ixzz23Svoo5s8

   So if Paul Ryan is a game changer it may be in the Congressional races. There has been a brave attempt to claim that Ryan might put Wisconsin back in play; ie, they are trying to claim that a race that has been breaking for the President by a 5 to 8 point lead in polls is going to go away because Ryan is from the state. Ie, Ryan will lead to a blip of 6 to 9 points in Wisconsin. 

   In reality he's already imperiled the Romney campaign greatly. Nobody in the GOP seriously-to use Paul Ryan's favorite word-thinks Romney wins without Florida. Yet, Ryan seriously jeopardizes what ever chances Romney has in winning Florida-even before this the last poll had shown Obama breaking away a little with a 6 point lead. 

   Now he's got to go to tell Florida's seniors and explain the serious plan to take away Medicare entitlements. Oh, wait. They're not supposed to use the phrase "entitlement reform" or "cutting entitlements" or declaring piously that "everything is on the table."

    As Florida Senator Ben Nelson observes:

     "“Gov. Romney’s pick is not good for seniors in Florida. It changes Medicare as we know it,” the senator said at a campaign stop in Jupiter, according to the Palm Beach Post. “I don’t think we want to have senior citizens in their retirement years having to haggle with insurance companies over their health care.”

     Read more:http://www.politico.com/news/stories/0812/79648.html#ixzz23SyD8HCa

     In truth GOP congressmen are concerned as well they might be. Each and everyone of them now had Ryan for a running mate, welcome or not. 

     "The reality is that Ryan is now every Republicans’ running mate whether they like it or not, forcing GOP candidates who would just as soon run from the debate over senior citizen entitlements to embrace the third rail of American politics like never before."

     "One GOP insider lamented that party leaders “have spent the last year” trying to take Medicare off the political front burner, but the Ryan pick “puts it all back out there now.”

     Read more:http://www.politico.com/news/stories/0812/79648.html#ixzz23SyYmEkO

    In other words, not only does Ryan seem unlikely to add anything to Romney's electoral math-and may indeed subtract in places like Iowa and Florida, but he has also complicated the race of every Republican Congressperson running in the country. 

     "Trying to turn the tables, the Romney campaign announced on Sunday that Ryan will travel to Florida next weekend to “highlight POTUS’ record of slashing Medicare for current Florida seniors,” tweeted Romney aide Brendan Buck."

     "But Republican unease with the Ryan plan was on full display earlier this summer, when the National Republican Senatorial Committee put money behind an ad that touted Rehberg’s opposition to the polarizing budget plan."

     Read more:http://www.politico.com/news/stories/0812/79648.html#ixzz23SzBbEFx

     "Democrats have spent years pillorying the Ryan budget with varying degrees of success in selected races, meaning the Wisconsin Republican has political baggage that every GOP incumbent and challenger must now face during the run-up to Election Day."
     "The National Republican Congressional Committee, aware of the political liabilities of the Ryan selection, circulated a press release on Saturday — just hours after the vice presidential announcement — pounding Democrats on Medicare."

    “House Democrats have built a long record of votes to gut and bankrupt Medicare,” the NRCC release asserted. “The Democrats cut hundreds of billions of dollars from Medicare to pay for Obamacare and empowered a board of unelected and unaccountable bureaucrats empowered to gut Medicare.”

    This is why the GOP was so quick on yesterday's Sunday shows to argue that Obama is the one who cut Medicare with his ACA health insurance law. 

    Still an in depth argument should play into the hands of the Dems:

     "Polls show that a fight over the Ryan budget could be the decisive factor in certain battleground districts."

     "A Democracy Corps poll released earlier this month showed that 52 percent of voters in these swing districts supported the GOP message of the Ryan plan. But after both Democrats and Republicans aired their arguments, Democrats squeaked slightly ahead, with 47 percent of voters opposing the budget and 46 percent backing it."

    “This budget is very vulnerable to attack — voters do not like the individual elements and a debate back and forth works to Democrats’ advantage,” read the polling memo from Democracy Corps.

     I think most every Democrat felt as Steve Israel did after hearing about Paul Ryan:

     "New York Rep. Steve Israel, chairman of the Democratic Congressional Campaign Committee, described Romney’s selection of a Ryan as a dream come true for House Democrats. Israel says the move allows Democrats to pound the GOP’s proposed changes to Medicare and Medicaid — issues where his party has traditionally had an advantage over Republicans — rather than the state of the U.S. economy."

     "I was shocked,” Israel said of the Ryan announcement. “I was secretly hoping they would pick Ryan. With all the polling on his budget, I didn’t think they would make my hopes come true."

     None of us did, Steve. Now who wants to guess the next state Ryan gets booed in? We know he's been booed at town hall meetings at home. 

Republicans In Competitive Races Distance Themselves From Ryan’s Medicare Plan

By Annie-Rose Strasser/Think Progress

Mitt Romney may hope that picking Paul Ryan as his running mate will help him shore up the Republican base, but many of Romney’s fellow Republicans in competitive elections aren’t quite as happy to see Ryan’s name on the November ballot.

Republicans in tight congressional races are moving to distance themselves from Ryan and the piece of legislation for which he is best known, his extreme “Path to Prosperity” budget, in hopes that they can win over swing voters by criticizing the Medicare-ending plan.

Here are just some of the candidates eschewing the Ryan budget:

Richard Tisei – In his district outside of Boston, Tisei won’t win on a hardline Republicans budget plan, so Tisei has tried to avoid the issue of the Ryan budget altogether. “I just don’t think it’s going to be an issue in this race,” hetold Politico.

George Allen – Virginia’s senate race is Allen’s best hope to get back into politics after his 2006 loss, and he’s hoping to be able to ally himself with the Romney-Ryan ticket without having to embrace Ryan’s proposed Medicare cuts. At a rally on Thursday, when Allen was asked about supporting the Ryan plan, he told reporter, “I think your assertion’s incorrect,” and “I haven’t had a chance to look at their latest permutation from it.”

Denny Rehberg – Rep. Denny Rehberg (R-MT) is running a competitive race for the Senate, and while he embraced Romney’s pick of Ryan, he simultaneously tried to signal to voters that Ryan and he had policy disagreements, writing in a release shortly after the announcement, there are “few occasions where” the two disagreed.

Chris Collins – Rep. Kathleen C. Hochul’s (D-NY) competitor refused to even discuss the Ryan budget with reporters over the weekend, fleeing from the quandary of the Ryan budget and its effects on Medicare. “I’m not going to get into a discussion now about a budget that may be passed next year with a new president and new Congress,” Collins told the Buffalo News, “I’m not going to go back and relive any proposal in the past because they are in the past.”

Brendan Doherty – The Rhode Island House candidate, Brendan Doherty, told Slate reporter Dave Weigel that he does not support the part of the Ryan budged that is “privatizing Medicare.”

Linda McMahon – McMahon’s opponent goaded the Connecticut senatorial candidate into distancing herself from the Ryan budget, releasing a statement asking whether McMahon would support Ryan’s Medicare cuts. In response, a McMahon spokesperson gave National Journal perhaps the most firm statement of opposition from a Republican candidate. “Linda McMahon will never support a budget that cuts Medicare,” he said.

As evidenced by this strategy video that instructs Republicans on how to cope with voters’ negative associations with the Ryan budget, this is a serious — and losing — issue for most Republicans. Their best hope is to quickly pivot the conversation away from Medicare, or they risk losing senior voters.

UPDATE

Maggie Brooks, who is running for the House in New York, doubled down on her disapproval of Ryan’s Medicare plan Monday, saying “It has always been my position that I do not support the Ryan budget and its proposals regarding Medicare. However, I applaud Governor Romney’s choice as Congressman Ryan understands the dire need for fiscal reform, reducing our immense national debt, and controlling unsustainable levels of federal spending.”

GOP refuses to focus on job creation

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RNC Chair: GOP’s Historic Unpopularity Shows Americans Are Upset With Obama

By Alex Seitz-Wald/Think Progress

A new CNN/Opinion Research poll released today finds Republicans’ popularity badly bruised by the bitter debt ceiling debate, with the GOP’s unfavorable ratings climbing to an all-time high of 59 percent. The party’s favorable ratings, meanwhile, dropped eight points over the past month to just 33 percent. “The Democratic party, which had a favorable rating just a couple of points higher than the GOP in July, now has a 14-point advantage over the Republican party,” said CNN Polling Director Keating Holland.

The network brought on RNC Chairman Reince Priebus this afternoon to respond to numbers. While saying he hadn’t studied poll in depth, Priebus embarked on stunningly brazen spin, blaming the drop in Republicans’ approval on President Obama. Despite host Brooke Baldwin’s repeated attempts to get Priebus to address the GOP’s unpopularity, the chairman kept going back to Obama:

BALDWIN: To what do we attribute this? Fallout from the debt ceiling debacle?

PRIEBUS: First of all, I haven’t really looked at it too deeply, other than the fact that I think it’s true that people are frustrated with a lot of what goes on in Washington. I think, most of all, people are frustrated with the president who continues not to lead during the most important in our country. But it’s not just a matter of leadership, Brooke, it’s a matter of what this president has put in place when he’s had the opportunity to lead. [...] He put in Obamcare.

BALDWIN: Hold on, Reince Priebus. [...] You see the numbers right there. Now versus July.

PRIEBUS: Okay, Brooke, and I told you, I think people are frustrated with politics in general. But the reality is we have a leader in Washington –

BALDWIN: Well, you mentioned the president, but I’m asking you specifically about your party.

PRIEBUS: I think people are frustrated with a lot of people in Washington. [...]And we have a president who is not a willing partner.

Watch it:

Party chairmen are expected to present news in the most favorable light for them and their party, but blaming his party’s unpopularity on the head of the other party is comical. And CNN’s poll is not the first to show that Republican congressional leaders’ intransigence and hostage on the debt ceiling hurt them politically. Americans overwhelmingly disproved of the GOP’s handling of the debt negotiations, and 74 percent of even Republicans thought revenue increases should have been part of the final deal.

Priebus’s comments once again show here’s nothing conservatives aren’t willing to blame Obama for.

Bad news for Congressional Republicans

From Public Policy Polling






PPP's newest national poll finds that after a little more than 3 months in charge House Republicans have fallen so far out of favor with the American public that it's entirely possible Democrats could take control of the House back next year.

43% of voters think that House Republicans are doing a worse job now than the Democrats did, compared to only 36% who think the GOP has brought an improvement. 19% think things are about the same. 62% of voters thinking that the Republicans have either made things worse or brought no improvement to an already unpopular Congress does not bode particularly well for the party.

46% of voters say that if there was an election for Congress today they would vote Democratic, compared to only 41% who would vote Republican. That five point advantage for Democrats is only a hair below the margin Republicans won by in the national popular vote last year. A victory of that magnitude for the Democrats next year would at the very least result in the party taking back a large number of the seats it lost last year, and it could be enough to take back the outright majority- hard to say at this point without knowing how good a number the GOP can do in redistricting.

The key to this strong movement back toward the Democrats right now is the same as the key to the strong movement away from the Democrats last year- fickle independents quickly growing unhappy with the party in power. Exit polls showed independents supporting the GOP by a 19 point margin last year at 56-37. Now only 30% of those voters think that the Republican controlled House is moving things in the right direction, compared to 44% who think things were better with the Democrats. Given those numbers it's not much of a surprise that independents now say they'd vote Democratic for the House by a 42-33 margin if these was an election today, representing a 28 point reversal in a span of just five months.

These poll numbers also point to the reality that Republicans taking control of the House may have been one of the best things that could possibly have happened for Obama's reelection prospects. Although we found the President with slightly negative approval numbers on this poll, when asked whether they had more faith in Obama or Congressional Republicans to lead the country in the right direction 48% of voters picked Obama to only 42% who went with Congressional Republicans. Voters may not love Obama as once they did but they're finding him to be more reasonable than the alternative and that means it will be hard for the GOP to knock him off next year without a top notch nominee.

One thing is very much for certain- it's not 2010 anymore.