Monday, March 15, 2004

"Link between taxes and unemployment is absent 

So much for about two decades of Republican bloviation, along with whatever claim Bush is making for tax cuts this week.

When President Bill Clinton raised taxes in 1993, the unemployment rate dropped, from 6.9 to 6.1 percent, and kept falling each of the next seven years. When President Bush cut taxes in 2001, the unemployment rate rose, from 4.7 to 5.8 percent, then drifted to 6 percent last year when taxes were cut again.

It has become conventional wisdom in Washington that rising tax burdens crush labor markets. Bush castigated his political opponents last week for "that old policy of tax and spend" that would be "the enemy of job creation."

Yet an examination of historical tax levels and unemployment rates reveals no obvious correlation.

"The fact of the matter is, we have much higher rates of employment today than we did in 1954, but our level of taxation is considerably higher," said Gary Burtless, a labor economist at the Brookings Institution. "You simply can't look at total taxation to find employment levels."
(via WaPo)

I love that this is under the heading "For the record." Maybe "balanced coverage" of the campaign will now include a reference to this story that notes that what the Republicans are saying is the exact opposite of what actually happened during the Clinton years?

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