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  • Pro-Growth Tax Cuts Always Create Jobs: MSNBC’s The Ed Show Misrepresents Heritage Position

    Congress has an important decision to make before the end of the year: Extend the 2001 and 2003 tax cuts or allow them to expire and significantly raise taxes. There is never a good time to raise taxes because higher taxes always come with a steep cost: slower economic growth, fewer jobs and lower wages.  To raise taxes now while the unemployment rate lingers at 10 percent is simply reckless and irresponsible.

    Some like Ed Schultz of MSNBC’s the Ed Show claim that keeping the tax cuts in place won’t help the economy and create jobs. This is a fact he tried to make when I was on his show last week.

    Pro-growth tax cuts such as reductions of marginal income tax rates and lower tax rates on capital gains and dividends always create jobs. But extending the tax cuts is not cutting taxes. It is keeping in place the tax code we’ve had for the last decade. As such, extending the tax cuts would not create new incentives for businesses to hire and individuals to save and invest. On the other hand, allowing the tax relief to expire would be a substantial tax increase that would destroy countless jobs.

    Despite my reiterating these points numerous times, Schultz has since misrepresented my point by claiming the Heritage Foundation said “the tax cuts won’t create jobs.” This could not be further from the truth.

    If Congress allows the cuts to expire, for all taxpayers or just those making more than $250,000 a year, the already anemic economic recovery will slow further. Higher taxes on top-earners will hit job creators like small businesses and investors the hardest. This will reduce job creation and lower wages.

    Unless we all want the unemployment rate to linger at 10 percent or above, Congress should make permanent the 2001 and 2003 tax cuts for all taxpayers as soon as it comes back from recess. Although this would only solidify the tax code where it has been for a decade, removing the uncertainly businesses and individuals are experiencing would itself be a boon to the economy. With renewed certainty about their tax positions, job creators will get off the sidelines and start investing. A temporary extension won’t do the trick. That would only be a signal to individuals and businesses that Congress plans to raise their taxes further down the road.

    Posted in Economics [slideshow_deploy]

    19 Responses to Pro-Growth Tax Cuts Always Create Jobs: MSNBC’s The Ed Show Misrepresents Heritage Position

    1. Pete Kent (Heartland says:

      Why should anyone be surprised at misrepresentation of the conservative point of view on MSNBC. Y'all thought that was news?

      LOL Keep up the good fight and keep providing the intellectual firepower for our freedom movement.

      petekent01 (on twitter)

    2. Donna H. says:

      Ah, the investors will have less money to invest!–Well, for the last 20 or so years too many investors have been investing in financial markets, chasing bigger and bigger profits by investing in the ponzi scheme of dodgy financial instruments and pretending that the real estate bubble is the one that's not going to burst. They abandoned real American companies that produce something contributing to our economy because those companies' short-term profits weren't enough to satisfy their greed. They've demonstrated that they don't give two hoots about the American economy, just their own pockets. And now Republicans want us to bear a greater tax burden and give money to those investors so they can play Las Vegas games with our money once again!?!

      Give it to those who've been unemployed (through no fault of their own!) and who will spend it buying real goods, not rhinestone-studded pieces of paper. Give it to small business through the Small Business Administration so they can pass it on to the small businesses who actually have a plan to expand. Give it to clean energy companies so we can reduce our dependence on foreign oil, and create more jobs. But don't give it to investors who gave it to the banks and financial companies that got us into this mess in the first place.

    3. West Texan says:

      Has Mr. Ed ever heard of market confidence? Extending the Bush tax cuts will go a long way in boosting employer confidence. And YES, this alone will help create jobs. With Obama and company's out-of-control tax and spend policies, employer confidence is at its all time worst.

      By the way, Mr. Ed is the name of a smart-alec talking horse. On second thought …?

    4. Bobbie says:

      Limited thinkers indicate their mental retardation to think beyond and open their mind to grasp reality.

    5. RG Odom, Lauderdale says:

      Dubay

      You are out of your mind!

      My 4 year old sometimes has a problem with the truth, his mother calls them little white lies…However if we don't break him of this bad habit, are there any other jobs at The Heritage Foundation like yours for habitual Liars and Spinners?

    6. Iain, U.S. says:

      The Democrats wanted the sunset clause.

    7. blueegyptian, ca says:

      This is the same argument used in 2003, and I haven't seen the small business investment over the last 8 years. With the exception of a sub-sub-prime market and a runaway derivative market based upon much of the former, where is the investment and the job creation? Creating jobs in Mexico, India and China in that "free market" so often spoke of doesn't really count, does it?

    8. Brad, Detroit, MI says:

      Some people just don't get it. Everyone thinks that the Bush tax cuts were for only the "mega-rich". Sorry, that is simply not the case. They were across-the-board tax cuts. I am certainly no fat cat, but the tax increase that I will see personally starting in 2011 is easily $300/month. When folks like me get hit with higher taxes and less disposable income – guess what ? We spend less. Maybe we don't go out to eat as much (waiter/waitress loses their job), maybe we hold off on buying a new car (long list of people in this area that are affected), maybe we drop our cell phones and cable TV (again, long list of possible side effects). Multiply this by the millions of people that actually pay taxes, and there is NO DOUBT there will be a loss of jobs and slower recovery.

      Just a reminder to the moronic liberals out there – The government does not and will never – CREATE jobs. They cannot make a single job without first taxing the money out of the economy first before giving it to someone else. Who do you trust more with your money ? Yourself or some mid-level government bureacrat. Always vote for the candidate that will spend your taxpayer money like it was their own. Not like the current group like teenagers with a credit card.

    9. Steve, OH says:

      Donna, you are confusing financial investors with the business investors that would actually benefit from the tax cut extension. These are the people who are investing in THEIR OWN COMPANIES, buying material and labor to expand their business. And how would the extension cause "us" to bear a greater tax burden? Only if the out-of-control govt spending causes the fed govt to raise taxes would that happen. Things like giving the taxes levied on my hard earned money to somebody who is unemployed because we are in a recession. What else are they supposedly "entitled" to…. my car? my boat? even my house? And it isn't the banks and financial institutions that forced so many sub-prime mortgages to be granted… it was Congressional pressure to create "equal" access to financing based on social justice (based on race, gender, sexual orientation, etc) rather than the standard free-market practices of granting loans based on the ability to pay them back! So if you really want to find the true reason we're in the mess we're in, look no further then your own, meddling Federal governement. .

    10. West Texan says:

      Donna, your "greed" scenario is brought to you by your beloved federal government. Who else could design such a risk free sub-prime pseudo-market capable of undermining free economies. As advertised, your big daddy's uninvited interference brought the U.S. economy to its knees. Regarding private investors, they can go to Vegas and buy or do whatever they want as it's their money. Fact is, you can redirect your accusatory finger toward the halls of Obama, Reid and Pelosi's exclusive Beltway club. Their so called benevolence redistributing other people's money hasn't slowed them down from living the wealthy lifestyle. Has sort of an 18th century French twist to it. Only a small fraction of your targeted investors show that much greed. Those that do are encouraged by the feds artificially low risk pampered world. As for the majority of private investors, they create the jobs that made our nation a market force. If not for these American entrepreneurs, we'd be flooding south to Mexico. And that's a fact.

    11. Lloyd Scallan (New O says:

      Ed Schults did his job according to the dictates and policies of MSNBC, regardless of how distasteful it is. The most disgusting aspect is the HF pit this total dud Crutis Dubay against Schultz. The subject was totally

      lost in this beat-down allowed by HF by sending a kid into the lions den with nothing but a smile for protection. HF should be ashame and embarrissed to have

      such a incompetent on it's staff.

    12. Bryan, seattle says:

      They get it, they just don't want to admit when they have been wrong for so long. The press sees this as becoming, inevitably a socialist country and are trying to stake there claim in the new hierarchy.

      They misjudged the passive nature of we Americans. Freedom of the press includes the right to be morons, I guess.

    13. Cliff, North Little says:

      Anyone notice that ole Ed said…" cutting taxes is not an idea "? This level of delusionalism has apparently reached a malignancy that is at the very core of the disease of modern day liberalism.

      Wonder if Obummercare will cover this affliction? Not likely, cause folks that are plagued with this "progressive" mentality are doomed to continue lookin' for that …"hope-n-change" in vainsvlle.

      STOP PUNISHING the productive and you will get MORE of them !!!

      As this occurs MORE revenue will FLOW into our US Treasury. We then can debte as to HOW it is spent.

      Cutting the taxation and justifiable regulations on the American Entreprenuers and Small Business Owners is not only an idea(s), but

      THE ONLY IDEA(S) that will effective boost our Nations OVERALL economy within ALL financial sectors and divisions of our general public as well.

      Every time I try to stomach and/or brain the "Ed-ster", with his arrogant rants of illogical/unfounded demagoguery, both organs seem to devolve into a spherical loop of mediocrity … mmmmmmmmmmm wonder why???

    14. Lou, Tucson AZ says:

      The Obama administration is using the same tactic my kids use to justify a big expense. If product xyz was selling for $300, but NOW it's on sale for $250, they just SAVED $50. They forget the fact that they are still $250 poorer. Allowing the tax cuts to expire WILL result in a tax hike, there can be no denying it. However, in Washington's twisted logic, extending the tax cuts is somehow a "new" tax cut? Really?

    15. Bill Schnitzer, Kihe says:

      I try to listen to big Ed on the radio to get the other sides point of view. I last about 10 minutes until I want to PUKE. Ed Schultz misrepresents everything on both sides.

    16. Karin Puh says:

      Can you point me to economic scholarship that explains the exact mechanism by which a lowering of capital gains taxes or marginal rates creates jobs? I'm not being cute, I really want to understand the mechanisms that create direct causal relationship between these two events.

    17. Rich says:

      What is the solution for job creation? If the Heritage Foundation doesn't believe that cutting taxes is always the means of creating jobs, then exactly how does unemployment come down now? What can be done? Is the position of the Heritage Foundation now that tax rates are optimal and we need to do other things? If so, what are those other things?

      One thing I never got out of the knee jerk reaction I hear about always cutting taxes to create economic growth, and never raising them, is that does it mean either we eventually hit a place where we never tax anyone, and/or we hit a place where there will no longer be any unemployment and we never face a recession?

    18. John, Alabama says:

      While an extension of tax cuts is not a "new tax cut", it is a newly locked in loss of revenues for the fiscal year that we were collecting prior to Bush being in office. If we are serious about debt, we need to have a less partisan discussion about what is more important. Additionally we need to look at alternative ways to specifically target the people we believe need the money (small businesses, etc). Blanket tax cuts are primarily serving the special interests with the money that pay for campaigns. I don't think hedge funds and private equity firms are employing that many people… Markets like certainty, whether it is certainty of a tax extension or certainty of a tax increase. They will hire either way (the difference in hiring quantity we can debate).

    19. jaykimball says:

      US Income Inequality, as measured by the Gini Index, is at an all time high. We have now joined the ranks of Rwanda, Nigeria, Mexico, and Uganda.

      I put together a few charts (see link below) showing 100 years of tax rate and income trends for the top 1% of earners.

      Bottom line:

      - Top 1% Income at all time highs

      - Top 1% Tax rate near record lows

      - Income Inequality at all time high

      The top 1% are doing just fine.

      Time to stand by the middle class.

      Charts and details at:

      http://8020vision.com/2010/11/16/when-does-the-we

      Jay Kimball

      8020 Vision

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