Higher taxes, lower unemployment rates


iconThe hollow skulls at the Washington Post are trying to make the case that higher taxes means lower unemployment. They spout endless numbers to make it sound as if taxes are actually good for the economy. Unemployment was higher under Reagan than Clinton, and spiked again when George W. Bush took office. See! See! Taxes are good for unemployment numbers.

But I think that the most telling example is this one:

Total taxation in Sweden, including local taxes, is equal to 59.2 percent of that country's economy, the highest level in the 27-member Organization for Economic Cooperation and Development. In contrast, the U.S. total tax burden is 30.6 percent, lowest among the OECD members. Yet unemployment for the past two years in Sweden has been considerably lower than U.S. levels.
So how can that be?

Well, first of all, the Washington Post is talking about unemployment rates, not jobs. According to the Bureau of Labor Statistics, unemployed is defined as someone "who had no employment during the reference week, were available for work... and had made specific efforts to find employment sometime during the 4-week period ending with the reference week." In plain English, that means that people who aren't actively looking for work, aren't considered unemployed. Now, if you lived in socialist Europe where almost 60% of your income was seized by the government, would you be looking for work? I know I wouldn't, and that would mean that although I'm not working, I'm not considered unemployed either.


Category:  Blaming the Media
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