Romney preaches supply-side economics. That is the theory that cutting taxes on the rich and on corporations will stimulate the economy. “Most economists do not subscribe to supply-side economic theory” (Wikipedia). Experience shows that it doesn’t work. Post-WW II economic growth, when the top income tax rates were very much higher, was much more robust than in the last two decades, when the rich got big tax breaks. Moreover, research by the Brookings Institution, the IMF, and dozens of economists at top universities show that inequality of income slows economic growth, as is happening here now. Disparity of income in the U.S. is the greatest of any industrialized country.
Corporations are already awash in cash that they can’t profitably invest because the middle class doesn’t have the money to buy what they could produce. There is no way that cutting their taxes would cause them to invest more.
Now, Romney proposes to cut the top tax rate on the super-rich and to eliminate taxes altogether on capital gains and on estates, which is where the rich get most of their wealth. If they succeed, the top rate will be less than one-third of what it was under Eisenhower, when the economy was robust. Even then, the rich had enough for their yachts and their mansions. But their greed has no limit! They are pouring so much money into the election that they may very well succeed, at the expense of the middle class.
Milt Lauenstein
Exeter
