What Does Progressive Versus Conservative Matter? How About Survival Of The Species?

When it gets down to brass tacks, our species lives or dies on enlightenment or the lack thereof.

We're not the fastest. Nor the strongest. Nor the toughest. We lack sharp, pointy teeth and claws. But we learn. We figure out and understand. We develop new and better means to deal with our world and ourselves for our mutual benefit. We progress. It's our shtick.

It's what we do to survive ... or fail to do and decay.

Every time we fail to challenge science denialism, our species slips closer to oblivion. ...whether at our own hands or by failing to foresee and adapt to nature.

Every time racism or sexism goes un-chastised and is allowed to fester, our collective chances of making it through the next billion years drop a little bit.

Every time destructive notions that hurt our prosperity -- like Trickle Down -- get brought up without being smacked right back down, we slide a bit closer to the dustbin of species by squandering our potential.

Cuts to education funding don't just make it harder for our businesses to find a pool of qualified labor at reasonable cost. Cuts to education funding reduce our chances of survival versus what they could be.

Cuts to research funding don't just make it harder for our researchers to move their fields forward; they make it that much more likely that we'll lack sufficient findings to adapt to each new event.

Cuts to infrastructure funding don't just make the roads harder on our cars; they decrease the efficiency of our species ... an efficiency that will at times be sorely needed.

Our art, our culture, our science, our philosophy, our history, our understanding ... these aren't just niceties to enjoy as surplus, as if they were mere fringe benefits. These are necessities. Our survival builds from enlightenment. From progress. It lives on progressiveness.

Conservatives would tear down all that progressives have built and stand in the way of further progress. Robbing us of our species' strong suits. Leaving us more vulnerable to cataclysm.

So go ahead and stand up to that conservative loudmouth. It matters.

Real GDP Growth and Top Marginal Tax Rates

Regressive fiscal policy depends on the idea that cutting upper bracket taxes will somehow bring growth. Reality seems to show quite the opposite results, as seen in the charts below.

GDP data from the BEA; covering the span of 1930 - 2011

One could argue that perhaps the above chart of GDP growth under the same year as the tax rate might not fully capture the impact because it may take time for changes in investment activity to filter into production of goods. So below let's look at a chart compiled by lining up the tax rates with the GDP growth for the year following the tax rate.

GDP data from the BEA; covering the span of 1931 - 2011

It's hard to get more clear than that. In both the same year and next year match-up scenarios, top marginal tax rates of 70% and above clearly correspond with higher GDP growth than top marginal tax rates below 70%. Indeed, during the Reagan years -- contrary to regressive notions -- lowered top marginal rates came with a corresponding drop in real GDP that manifested as a clear, year to year linear trending correlation. These correlations don't necessarily prove that the higher tax rates caused the higher GDP growth, but they certainly prove that lower tax rates have failed to fulfill the regressive claim. Judging from history, one can not reasonably expect that lowering upper bracket taxes will spur growth. And as Diamond and Saez have shown, there's no reason to expect lowering upper bracket taxes would increase our tax revenue either, since the optimal upper bracket rate for revenue collection sits far higher on the scale than where we are now, somewhere in the 70+% range.

If anything, the data suggests that raising upper bracket taxes may be more likely to spur growth. How could that be? The obvious answer is reinvestment. Lower upper bracket taxes encourage avoiding reinvestment to reap profit. Higher upper bracket taxes encourage reinvestment to avoid reaping taxable profit. That said, increasing upper bracket taxes alone will not fix everything. No matter how much tax policy encourages investment, there must be domestic market demand in order for domestic investment to make sense. Yet given enough demand to make domestic growth investments rational, higher upper bracket taxes can -- and logically will -- encourage that positive choice.