I was right: John Boehner and Republicans are lying about the Bush-era tax effect.

I posted earlier this week about how John Boehner made the ridiculous assertion on Face the Nation that half of all the income earned by small businesses would be affected by the expiration of the highest tier federal tax rate? The NYT did their own investigation:

"Because 80 percent of America’s 32 million businesses are sole proprietorships, 90 percent of the tax cut would be derived from businesses without employees."

-and-

"A report released by the Joint Tax Committee in July found that many of the tax returns categorized as small businesses were actually filed by wealthy taxpayers who earned business income through limited partnerships or S corporations to allow their firms to avoid paying corporate taxes."

Yes, I am calling John Boehner and Republicans LIARS.  The problem is, so few Americans have even a basic understanding of how taxes work for the self-employed or for that which is generated outside of being employed by a company, that they are easily misled into believing the Republican lies about what the effects of increasing the top tax bracket are.

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Since 1982, we've had 3 changes of tax policy that have altered the top US marginal tax rate.  (You can track the changes in income tax rates here, and GDP here.)  Year Zero is the first year of each tax change.

Can you tell which of the three lines indicates a tax cut and which of the three indicates a tax increase?  One line reflects a marginal tax rate cut from 70% down to 28% by year 6; another reflects a marginal tax rate cut from 39.6% to 35% by year 3; another reflects a marginal tax rate increase from 28% to 39.6% by year 2.

The point of this exercise, is to question the Republican notion that GDP and the top marginal tax rate have a direct causal relationship.  That is to say, if you believe what Republicans are telling America and the world, then we should be able to clearly distinguish which of these time lines indicates a tax increase, right?