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Chan Lowe gets things backward in his "Profiles in Courage" cartoon Monday in The Times. First, he attacks Republicans for supposedly not caring about the unemployed; he should recall that Republicans' top priority since the financial collapse in 2008 was to create new jobs. In the midterm elections, voters punished so-called progressives who put other things before jobs and the economy.
Second, when Republicans fight tax increases for high-earning Americans, they are fighting job-killing policies. In other words, they are pushing policies that provide incentives to invest in ways that create jobs.
This is especially important when 10 percent of Americans remain unemployed. The president himself recognizes this and has worked out a deal with Republican leaders.
An earlier tax increase that was a favorite among class warriors showed just how jobs are created and destroyed.
For "progressives" this 1990 tax increase seemed perfect: a targeted blow in class warfare, one that would supposedly hurt the rich. It raised taxes on luxury goods that only the wealthy could afford, from yachts to private jets.
But instead of hurting the rich, this tax cost 9,000 middle-class men and women their jobs, crippling the New England yacht industry. Instead of raising revenue overall, it actually cost the treasury money.
The luxury tax was supposed to generate $31 million in revenue, but it only raised half the projected amount. The rich cut their purchases of luxury goods. This is how higher taxes affect behavior in the real world when demand can vary with cost.
While the tax did generate $16 million in revenue, the government lost money, approximately $7. 6 million. The loss occurred because the government paid out $24 million in unemployment benefits.
This symbolic flogging of the rich cost middle-class people 1,470 jobs in the aircraft industry and 7,600 jobs in the boating industry. That wasn't supposed to happen in the progressive understanding of how the world works, but it is exactly what happened in the real word where economics 101 operates, where cost, supply and demand prevail.
A progressive, Joe Kennedy of Massachusetts, led the charge on the floor of the U.S. House to repeal the higher luxury tax. He was joined by others who recognized that their tax increase on the rich actually destroyed jobs.
Now, the challenge is whether "progressives" in the House and Senate will learn the same lesson and agree with the compromise their president has reached.
Jim Pilgrim
Gainesville