3. Over the last 30 years, the Republican-Right economic theory that economic prosperity and employment automatically "trickle-down from the wealthy" has been proven again and again to be fallacious. Tax cuts for the wealthy create huge investment money pools -- but not jobs.
4. Republicans are seeking to extend the tax cuts for the wealthy by falsely stating that increases in taxes for the upper 2% of income earners would hurt demand and prolong the economic downturn. Experience and history prove otherwise. The large majority of buying is done by the remaining 98% of the population. The top 2% invest much of their income, rather than spend it on consumer goods. Besides, compared to the rest of us, there are not that many of them.
Implications for the larger economy
Tax cuts at the highest marginal income brackets simply serve to concentrate wealth and political power in the hands of the economic elite. This power of the economic elite then pushes government policy in directions that dramatically cut the percentage of the nation's wealth and income that goes to the large majority of Americans. And this has been happening for at least the last 30 years. Hence the decimation of America's middle class.
The ever reduced incomes and wealth holdings of the middle class cuts into the ability of most Americans to buy goods and services. As a result, the economy falters because most customers do not have enough disposable income to keep the flow of goods and services at a level that is sufficient to generate the number of jobs and the kind of incomes that a vibrant economy and a healthy middle class requires.
That part of the national income that previously (prior to 1975) would have ended up in the hands of America's great middle class, as disposable income, has for more than 30 years been increasingly diverted into the pockets of our economic elite who, because they already had more money than they could possibly spend on goods and services, have used most of this recent "windfall money" to invest in things that turned out to be "bubbles." As a result, sound business enterprises lacked the numbers of middle class customers they had always depended upon. As a result, many such businesses faltered and had to start laying off employees and/or moving their factories or other operations to low-wage countries.