The Sophistry of the Job Creator Argument

About an hour ago I was on the treadmill in the gym watching Rep. Phil Gingrey (R, 11th GA) explain how he disagreed with the 63% of the American public that believes that the recent debt ceiling agreement benefited the rich at the expense of the middle and lower classes. He used the argument that people making more than $250,000 were the entrepreneurial job creators and that higher taxes would stifle job creation by this class. This is an argument that has been coming up since the Bush administration and it appears to me that hearing it while on a treadmill is extremely appropriate.

Once again, the right wing is showing that their approach to economics is religious rather than reasoned. I state this because someone once said that religion is the suspense of reason and reason based upon research shows that taxes do not have the effect that the Gingrey and his cohorts claim:

1. Around the time of the 2010 election a small business association asked its members what it would take to get them to hire more people. The response was: an increase in the demand for the goods and services that they produce.

2. A article published in CFO.com (April 2004)reported on a study entitled "Tax Breaks Don't Boost Investment". The research looked at 275 companies that were given tax breaks to stimulate investment. The smaller companies, which were closer to the entrepreneurial level, actually decreased their investment by an average of 13%. The researchers conclusion was that demand was the true determiner of planned investment.

I believe that there are only two possible explanations for the Right's persistence in their opposition to tax increases: as I stated earlier they have turned their economic philosophy into a religion or they believe that its okay because they've got theirs and '...to hell with everyone else...'. This holds true especially in light of the fact that S&P included the seeming impossibility of raising taxes in the current environment as one of their reasons for downgrading U.S. Government debt.