Rich People's Taxes Have Little To Do With Job Creation
#1
Posted 13 July 2011 - 10:28 PM
Last week we pointed out that even though conservatives seem obsessed with the top income tax rate, overall economic growth was actually stronger during periods of higher tax rates. But maybe we missed the point. Maybe what conservatives are really concerned about is job growth, not overall economic growth. Maybe they have some convoluted argument about how the tax rate for rich people is incredibly important for creating jobs.
Cue the quotes:
Speaker John Boehner (R-OH): “What some are suggesting is that we take this money from people who would invest in our economy and create jobs and give it to the government. The fact is you can't tax the very people that we expect to invest in the economy and create jobs.”
Former Massachusetts Gov. Mitt Romney: “With over 20 million people who are unemployed or who have stopped looking for work, the last thing we should be doing is raising taxes on job-creators, entrepreneurs, and small business owners across America.”
John Boehner, again: “A tax hike would wreak havoc not only on our economy’s ability to create private-sector jobs, but also on our ability to tackle the national debt.”
Apparently, conservatives believe that a key driver of overall job growth is the tax rate that rich people pay on their last dollar of income. They argue that these very rich people are the ones who “create” the jobs and therefore taxing them at even slightly higher rates will make them less likely to invest, expand their businesses, and hire more people. That sounds plausible, but it turns out to be completely baseless.
In fact, they are just as wrong about this as they are about the relationship between marginal tax rates and overall economic growth. In the past 60 years, job growth has actually been greater in years when the top income tax rate was much higher than it is now.
For instance, in years when the top marginal rate was more than 90 percent, the average annual growth in total payroll employment was 2 percent. In years when the top marginal rate was 35 percent or less—which it is now—employment grew by an average of just 0.4 percent.
And there’s no cherry-picking here. Pick any threshold. When the marginal tax rate was 50 percent or above, annual employment growth averaged 2.3 percent, and when the rate was under 50, growth was half that.
In fact, if you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher. The top 10 years would share marginal tax rates at 50 percent or higher. The two worst years, on the other hand, were 2008 and 2009, when the top marginal tax rate was 35 percent. In the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation.
We showed last week that lower rates are not associated with faster overall economic growth—just the opposite, in fact. And now we know that lower rates don’t coincide with higher job growth, either. So where is the evidence that the lower marginal tax rates spur job creation? It’s certainly not present in the past 60 years of American history.
It’s worth keeping this in mind the next time a conservative lawmaker claims that raising the rates for the wealthy would “destroy jobs.”
http://www.americanp..._charticle.html
Michael Linden is the Director of Tax and Budget Policy at American Progress.
#2
Posted 14 July 2011 - 01:37 PM
Anyway, they really believe they'll get there, so somehow they identify with republican policies. Little do most people realize they will never get there and they consistently vote against their best interests. The rich do not create jobs. They invest. They buy up houses and rent out to the the average Joe to rake in the cash.
#3
Posted 14 July 2011 - 05:33 PM
#4
Posted 14 July 2011 - 05:46 PM
#6
Posted 15 July 2011 - 09:46 PM
#12
Posted 04 August 2011 - 05:05 PM
#13
Posted 04 August 2011 - 06:39 PM
On companies. If the cost of doing business goes up a noticeable amount because of increased taxes, they will either raise prices, shrink portions for same price, lessen quality or cut employees. I doubt they will just gladly pay it.
Welcome to the jungle.
Thus, inflation. I don't know the technical, econ 101 definition of inflation, but I define it as the slow, inevitable effort of each and every company to make a little more profit, leading to increases in wages (so people can afford shit), leading to another increase in price to compete for that new money, and so on ad nauseum.
#14
Posted 07 August 2011 - 03:04 AM
This whole notion that the rich and big corporations are "job creators" is a goddamn lie, invented for nothing more than a sheer political power grab. It's completely made up crap!
[blockquote]
From: Two Santa Clauses or How The Republican Party Has Conned America for Thirty Years
. . .
By 1974, Jude Wanniski had had enough. The Democrats got to play Santa Claus when they passed out Social Security and Unemployment checks – both programs of the New Deal – as well as when their "big government" projects like roads, bridges, and highways were built giving a healthy union paycheck to construction workers. They kept raising taxes on businesses and rich people to pay for things, which didn't seem to have much effect at all on working people (wages were steadily going up, in fact), and that made them seem like a party of Robin Hoods, taking from the rich to fund programs for the poor and the working class. Americans loved it. And every time Republicans railed against these programs, they lost elections.
Everybody understood at the time that economies are driven by demand. People with good jobs have money in their pockets, and want to use it to buy things. The job of the business community is to either determine or drive that demand to their particular goods, and when they're successful at meeting the demand then factories get built, more people become employed to make more products, and those newly-employed people have a paycheck that further increases demand.
Wanniski decided to turn the classical world of economics – which had operated on this simple demand-driven equation for seven thousand years – on its head. In 1974 he invented a new phrase – "supply side economics" – and suggested that the reason economies grew wasn't because people had money and wanted to buy things with it but, instead, because things were available for sale, thus tantalizing people to part with their money. The more things there were, the faster the economy would grow.
At the same time, Arthur Laffer was taking that equation a step further. Not only was supply-side a rational concept, Laffer suggested, but as taxes went down, revenue to the government would go up!
Neither concept made any sense – and time has proven both to be colossal idiocies – but together they offered the Republican Party a way out of the wilderness.
[/blockquote]
And for the record, the author didn't make up the Two Santa Clauses description for his title, that was the genuine way that craven prick defined his fairy tale policy. http://en.wikipedia....ta_Claus_Theory
The rich in this country have always understood that their tax rates would be higher, but the burden they "suffered" for it was minimal to non-existent, until these bozos took over. It's no goddamn coincidence that we suffered massive banking failures in the '80s under Reagan (or did everyone forget the S&L Crisis) and then again under Baby Bush. Giving the wealthy huge advantages over the average working schlub just leads to more greed and avarice, not more jobs. And when you add deregulation into the equation, there's no other outcome one should expect!
Last year, corporate profits were the highest they've ever been in the history of for-fucking-ever. So where are the jobs? HA! Don't make me laugh.
[blockquote]http://www.wickedloc...d#axzz1U5vuQaTc
In 1975, the top one-tenth of 1 percent accounted for 2.5 percent of the nation’s personal income. By 2008, the top one-tenth of 1 percent of earners, with an average income of $1.7 million, took home 10.4 percent of the national income.
In the same year, the last year for which Whoriskey could find complete figures, the bottom 90 percent of earners accounted for just about half of the national income. Their average income was $31,144.
While the pay of the top 0.1 percent increased nearly fourfold -- some 385 percent -- since 1970, the pay of the bottom 90 percent was basically flat, and by one table actually fell by 1 percent.
[/blockquote]
To quote Teddy Roosevelt, I don't begrudge a man a dollar, if it's a dollar fairly earned. But these fuckers aren't earning their dollars fairly.
[blockquote]http://blog.reidrepo...tic-capitalism/
Today, corporations are not led by larger than life “robber barons” — but rather by the ruthless concept of “maximizing shareholder value,” which can be attained by growing sales or by cutting payrolls. The stock valuators are often indifferent to the means. Today’s CEOs rake in personal profits by ballooning stock, because it is in large part in stock that they are paid.
[/blockquote]
They profit off the backs of our labor, then flat out refuse to share any of the fruits of it with us. It's despicable, and it shocks me to no end that anyone in this country would actually support fiscal policies from a political party that not only allow this, but encourage it.
One quarter of all children in America are currently on Food Stamps. Projections indicate that that ratio will drop to one in every two children -- fully 50% of America's youth -- will be on Food Stamps at some point in their lives before the age of 18.
And yet Porsche Profit, Sales Surge On Rising Demand For Luxury Cars, where North American sales rose 25% to 15,466 cars.
#15
Posted 11 August 2011 - 04:49 AM
On companies. If the cost of doing business goes up a noticeable amount because of increased taxes, they will either raise prices, shrink portions for same price, lessen quality or cut employees. I doubt they will just gladly pay it.
Welcome to the jungle.
There are lots of examples of business absorbing costs without raising prices. That's one reason why inflation is so minimal right now. Anyway, businesses hardly pay taxes except employment taxes. So the current tax system is, basically, a disincentive to hire.
1 user(s) are reading this topic
0 members, 1 guests, 0 anonymous users