Hey rich guy! Where's my job!

“Hey rich guy, where’s my job?”

"Today, no,"

Mayor Bloomberg’s answer, 04/23/11 on Fox News Sunday, when asked if he backed White House plans to raise $1 trillion from tax hikes on families earning more than $250,000.

The Republicans relentlessly oppose any rational discussion on taxes.

No news there.

The Republicans argue that taxes are a drag on the economy. Taxes, they say, will hinder the recovery by taking money away from “Wealth Creators.” This in turn means less money for the benevolent rich to invest in industries that create jobs.

Wealth’s race to the top over the past 30 years has been well documented. This realignment of wealth did not slow during the recession and continues today. Job growth remains slow. Wages for the “middle class” remain flat.

Yet Republican elected officials continue to stand tall for cutting taxes or keeping taxes low in the top bracket, while cutting big holes in the safety net. Republicans do this to keep the burden light on “wealth generators” so that they can create economic growth. An increase in taxes is “jobs killer.”

To listen to the Republicans you would think that states with lowest taxes would be booming and have the lowest unemployment. After all, those “wealth creators” with such low taxes, those “wealth creators” have plenty of “wealth” to spread around.

It isn’t working out that way.

For example, take Nevada and California.

A report by the Tax Foundation, issued in October of 2010, defines business climate in terms of business tax burden. They state “Taxes matter to business. Business taxes affect business decisions, job creation and retention.” They conclude, “a state with lower tax costs will be more attractive to business investment and more likely to experience economic growth.” (http://www.TaxFoundation.org/files/bp60.pdf). They rank Nevada as having the 4th best business climate in the country and California as 49th.

So according to Republican Tax doctrine, summed up so nicely by the Tax Foundation, Nevada should be doing better economically, than California, with lower unemployment and stronger growth.

In September of 2010, the US unemployment rate was 9.2% California’s unemployment rate was 12.1% and Nevada was at 15.1%. (Source: US Bureau of Labor Statistics). Interestingly, New York, ranked 50th by the Tax Foundation, had an unemployment rate of 8.2% in September of 2010 - a full point below the national average and 6.8% less than Nevada. New York’s unemployment has been at or below the national average since 2006 and consistently below the national average since April of 2008.

Republican doctrine also says with such low taxes, Nevada would be recovering faster than either California or New York. But, according to information released in November of 2010 by the US Department of Commerce’s Bureau of Economic Analysis. (http://www.bea.gov/newsreleases/regional/gdp_state/gsp_newsrelease.htm), it isn’t. Between 2008 and 2009 the GDP of California fell 2.2%, New York’s fell 4.3% and Nevada’s fell 4.6%.

The Republicans would have the country believe that low taxes are the road to prosperity. But this simple comparison between tax rates, unemployment and GDP seems to indicate that there is not a strong co-relation between taxes and strong economic growth. Nevada, should have gotten into the recession later, and gotten out earlier with a shallower trough than either California or New York.

Clearly Nevada’s economic woes stem from the housing bust. But its economy was not diversified enough to withstand the collapse of the state’s construction industry. However, according to the Republicans, it should have. Before the recession industries should have been streaming out of California into Nevada to build a diversified economic base. That didn’t happen. Nevada’s economy is gaming, tourism and homebuilding. All three slowed or imploded.

According to Republican economic theory what happened in Nevada, shouldn’t have happened. But it did, and it is happening all over the world. In the 2008 Presidential campaign Republicans kept using Ireland as a model of a pro-growth corporate tax structure. Ireland has the lowest corporate tax rate in Europe.

It also has one of the weakest economies in Europe. Its bailout, along with Greece and Portugal pose a threat to the economic stability of the Eurozone.

“Wealth creators” are getting a big tax break to create jobs. It isn’t happening. Workers all over world in every language are crying “Hey rich guy! Where’s my job!”