Republicans are, in a sense, right about two things: (1) There are some counterproductive regulations on the books. (2) U.S. corporate tax rates are quite high compared to many other countries, although the effective tax burden on corporations is low because we have an abundance of special-interest loopholes. (This is the explanation for why many CEOs earn more in salary than their Fortune 100 corporations pay in U.S. taxes, an absurd outcome.)
But the GOP suggestion that over-regulation and over-taxation caused the Great recession — or that changing those things will help the economy significantly — is complete hooey. Business investment (the blue line) is now high. What is disturbingly low is investment in housing (the red line). Government policy directed to fixing the latter problem might actually accomplish something. But that’s not what the GOP is proposing to do.
Here’s the graph via the careful economist, Matt Yglesias, whose explanation is here: