Tax Cuts for the Rich—Do They Create Jobs?

The recent lame duck session of Congress yielded the Obama-McConnell compromise on a temporary 2-year extension of the Bush Tax Cuts. The GOP position was that all tax cuts stimulate business, create jobs, and pay for themselves. Do tax cuts pay for themselves? Do tax cuts create jobs? If so, what kind of tax cuts? For all of the rhetoric it seems few realize about 36% of the Stimulus was tax cuts.

A huge part of the problem is how all the tax cuts are lumped together. Take this example; Deutsche Bank claimed if the Bush tax cuts were to expire, the recovery will die. Which tax cuts—the top, the middle, the bottom? What about the Stimulus tax cuts? How do we accurately estimate?

If the jobs created during the Bush administration are any measure, it appears other economic factors override the claim tax cuts are correlated to job growth.

Over the last year of this debate, there were numerous Op-Ed essays claiming tax cuts for the rich are Stimulus, are necessary for small business growth, and should be made permanent. The counterpoint being that tax cuts for the rich should expire and the additional revenue should be targeted to investments in infrastructure projects conducted by the private sector contractors that would directly create jobs.

Many economists say that was the problem with the original Stimulus—it wasn't directed enough into specific agendas: as examples, requiring companies hire Americans, invest in America, or that "Green" jobs funds had to be only used in the United States.

One thing is certain, tax cuts are correlated to deficits and debt. A major focus of the 112th Congress will be another debate on how to deal with the increased deficit generated by the Obama-McConnell 2-year extension of the Bush Tax Cuts. Is the answer in spending and budget cuts or letting the tax cuts work to grow the economy, jobs, and generate new tax revenues?

Students should create a report of at least 200 words, or a presentation of at least seven slides (links to models provided at end of activity) that cites at least three resources. Students should use the pathfinder to content listed below for best results.

Students should address the following essential questions for critical thinking (you can create or substitute others):

• What were the major arguments for continuing the Bush Tax Cuts?
  
  
• What were the major arguments for letting the tax cuts for those with net incomes over $250,000 expire?
  
  
• What would you have done if you could have made the decision and why?

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Researchers regularly report that today's early-career teachers are more interested in pay for performance than their veteran colleagues are. They seek to combine classroom teaching with other roles—for example, as an instructional coach or data analyst.

This type of Tiered Pay-and-Career Structure responds to early-career teachers' desire to earn more for what they accomplish, extend influence beyond the classroom, and enjoy a career that progresses over time. This strategy for education reform is the expectation that merit-pay will attract and motivate highly capable individuals to enter and remain in teaching, whereas low performers with little hope of winning a bonus will leave.

Among some school districts that have adopted merit pay programs, Denver's criteria to determine award bonuses include student achievement, professional development and committing to work in hard-to-staff schools or subjects. New York City's program focuses on the performance of entire schools, as opposed to individual educators, and awards up to $3,000 per faculty member to schools that meet performance targets.

Florida's STAR program ran into problems from the beginning. The state was to give bonuses to the top 25 percent of teachers based almost exclusively on standardized test scores. In Houston, school district also relied on student test scores; but the rewards were based on arcane formulas that most of the teachers found confusing.

Department Chairs and/or the Curriculum Director can assign Educator Challenge Questions to teachers that help them learn more about performance pay plans for teachers. This can be part of the overall professional development plan of the school district and therefore eligible for CEUs. This can be a pre- or post-assignment when an expert on the subject is scheduled as a speaker. Or, it can be a stand-alone assignment that is followed by curriculum and grade level workshops to discuss and distill what teachers have learned.

Teachers should address each Challenge Question below with a response of at least 50 words and submit their answers to their Department Chair or other assigned leader. "Reports" will be checked off to provide accountability and then returned without scoring or critique. No response is "right" or "wrong." But each response helps teachers to think critically about education reform. These "reports" can be utilized and shared later through follow-up workshops.

Educator Challenge Questions (staff developers can add or substitute others):

• How is performance being measured in most typical merit pay programs?
  
  
• What factors in merit performance programs do you agree with and why?
  
  
• What factors in merit performance programs do you disagree with and why?
  
  
• Are you for merit pay programs—why or why not?

Select Topic Search > Type "Merit increases AND Pay for performance" in the Search box > Click "Pay for performance AND Merit increases" > Select View documents