Thursday, November 1, 2012

Republican Myths




Individualism

The emphasis by the Republican Party on individual achievement is an example of a legitimizing myth.  Republicans believe individual achievement automatically confers power and authority. Republicans believe their policies are legitimate because their individual achievements confer power and authority over everyone else. Individual success in a business of any size merits respect and legitimizes that person’s social dominance over others. Governor Romney, the Republican candidate for President in 2012, was an example of this myth.

“Republicans emphasize the role of free markets and individual achievement as the primary factors behind economic prosperity. To this end, they favor laissez-faire economics, fiscal conservatism, and the promotion of personal responsibility over welfare programs.”[1]

The focus on personal responsibility and individual achievement produce the illusion of fairness.  The Republican Party legitimizes this myth with their promotion of policies that attack government spending, the national debt and the annual deficit while promoting private investment and commercial enterprise.  Voters are hoping that conservatives will follow through on their promises to restrain government spending, reduce regulation and avoid tax increases.

“It's not just a matter of ideological rigidity but a recognition that at a time of economic stagnation and explosive debt, the nation's best chance for success lies with policies of lower taxes, fewer regulations and reduced spending.”[2]

Taxes and the Economy

“The richest Americans are the least likely to spend extra money they get as a result of a tax cut, and are more likely to save it or invest it offshore. Those on the lower end of the economic spectrum, meanwhile, are the most likely to spend transfer payments they receive from the government.”[3]

Thomas L. Hungerford of the Congressional Research Service, authored a report on taxes and the economy that looked at the economy and tax rates since 1945.[4]

The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.

However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to how the economic pie is sliced—lower top tax rates may be associated with greater income disparities.”[4]


  1. http://en.wikipedia.org/wiki/Republican_Party_(United_States)
  2. http://washingtonexaminer.com/election-2012-drawing-the-wrong-conclusions-in-advance/article/2512243#.UJGlZkJqjHg
  3. http://www.huffingtonpost.com/2012/11/01/congressional-research-service_n_2059156.html
  4. http://www.docstoc.com/docs/134693051/CRS-Report-Top-Tax-Rates




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