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Jobs, taxes and political campaigns

July 9, 2012

Jobs and taxes are naturally linked. We pay, after all, an income tax.

The connection was underscored today when Obama reiterated his commitment to raising the tax rates on higher earners; that would be individuals making $200,000 a year and families earning $250,000 annually.

For everyone else making less than that, the current lower tax rates would remain.

And it's no surprise that the prez's tax announcement came on the heels of flat jobs numbers. June unemployment was 8.2 percent, the same as May. In June, only 80,000 new jobs were added. It's realistic, not cynical, to note that any presidential candidate would like to shift the discussion.

But in his almost 13-minute talk, Obama did mention jobs and their connection to taxes. It's at about three minutes into his address.



If you don't have time to listen, here's the job mention transcript:

"We've tried it their way. It didn't work. At the beginning of the last decade, Congress passed trillions of dollars in tax cuts that benefited the wealthiest Americans more than anybody else. And we were told that it would lead to more jobs and higher incomes for everybody and that prosperity would start at the top but then trickle down. And what happened? The wealthy got wealthier, but most Americans struggled. Instead of creating more jobs we had the slowest job growth in half a century."

Historical presidential job creation: And Obama has some numbers to back up his taxes and employment connection.

Jobs in America grew by only 2 percent during George W. Bush's administration. That rate, according to a January 2009 analysis by the Washington Post of information from the Bureau of Labor Statistics and the Bureau of Economic Analysis, was the most tepid job growth over any eight-year span since data collection began seven decades ago.

The next slowest job growth period? The four years of 2.4 percent employment creation when George H. W. Bush was in the White House.

Similarly, the country's gross domestic product from 2001 through 2008 grew at the slowest pace since Harry Truman's administration.

And Americans' incomes grew more slowly during Bush 43's presidency than in any other Commander in Chief term since the 1960s…except when Bush 41 was in office.

The presidential economic numbers are in a colorful, easy-to-compare table, making it hard to argue with the rest of Obama's comments earlier today regarding the economic effect of the current tax rates:

"Instead of widespread prosperity the typical family saw its income fall. And in just a few years we went from record surpluses under Bill Clinton to record deficits that we now are still struggling to pay off today. So we don't need more top down economics. We've tried that theory. We've seen what happens."

Do these numbers mean that anyone wants to pay more taxes? No.

But they do seem to show that Dubya's dad did get it right before he decided to reverse himself in order to be named Ronald Reagan's vice president. Trickle-down economics are voodoo economics.

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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