When did I say being rich was evil? And corporate profits would be fine if they actually led to job creation. But there is no evidence.
here is your argument from what I can tell:
Supply side tax cuts occur at the same time jobs are created = supply side tax cuts create jobs
Supply side tax cuts occur at the same time as miserable job growth = supply side tax cuts prevent jobs from being eliminated
It is all theoretical win/win. If the economy does well it is because of supply side economics. If it does bad then it would be worse if not for supply side economics.
As for your statement that times when corporate profits reached record lows were not fun for anyone isn’t true. Corporate profits were much much lower in the 90s, and the economy was doing much better.
Does that mean low corporate profits = a better economy? Not necessarily. But you can’t claim that high corporate profits lead to a better economy for people. There is no evidence for that.
And when people say ‘you need to keep taxes low so companies will have money to hire people’ I don’t get it because the wages aren’t taxed, they are deducted before the tax is calculated. The implication being presented is that higher taxes means less money to hire people.
I understand the difference between gross and net profit. But the rhetoric on the right implies that they don’t (in actuality I’m sure they do understand that, but half-true rhetoric that wages and benefits for working class jobs are taxed at 35% can get the working class to support supply side economics).
A basic economics course would be of great benefit to you.
I’ll restate one more time: there is no way to empirically test either the premise that increased corporate profits do, or that they don’t, lead directly to job creation–not without a time machine.
In the absence of demand for products, corporate profits do not create jobs. Why would they? That’s why the jobs disappeared in the first place; corporations laid them of because demand for products dried up, not because they lacked capital. They have trillions of dollars in capital, waiting for the market to change.
I’m sorry that that sounds like basic economics to you.
You should reexamine what you just said: “In the absence of demand for products…” In the absence of demand for products, nothing is going to create jobs.
So to answer the question meaningfully, you would have to stipulate that there is, in fact, consumer demand which could be satisifed by the expansion of capital, the resultant marketplace, and yes, jobs. All others things being equal, capital creates jobs. The fact that many corporations are stockpiling CASH (not capital), does nothing to disprove that basic axiom.
His painting of (increased) corporate profits as an inherently bad thing could have had no rational justification other than the populist view that businesses, corporations, rich people, etc. are themselves inherently undesirable.
I was more deriding the overall populist POV than that of Wesley, though, so if that isn’t his true outlook, I apologize for implying that it was. His somewhat shaky logic kind of impelled me to see his posts as just another anti-big business diatribe.
To answer your question, no, it wouldn’t be okay in a vacuum. There would have to be some demonstrable benefit from doing so. Sometimes, in fact, the tactic can backfire, in that increased taxation of the rich and corporations can actually decrease revenue. In Oregon, we recently passed a soak-the-rich bill that increased the marginal tax rate of the highest earners. The revenues collected from that portion of the tax dropped by $150 million in the next year. Three major companies that were going to build major operations in the Portland area decided not to after the tax was implemented–if you want to talk about the relationship between taxing the rich/corporations and jobs.
That is just fundamentally wrong. We increase the debt, start spending on infrastructure, get some paychecks flowing, before you know it, people start spending again. It is how we have always gotten out of recessions; at least, for the last 100 years or so, since the Federal Reserve was formed.
If you learned that in college, you should ask for your money back.
God, those stupid CEOs. All they have to do is convert all that cash to capital; maybe they should be fired. They are so stupid they probably think that they should fully utilize their current capital investments until demand increases. I don’t understand why people just don’t buy more stuff though. What difference does it make if you max out one credit card or two? I think that the 99% is basically unpatriotic for not spending more money.
Sorry, you don’t get to employ the internet kiddie tactic of sneering at a person’s argument in one breath and “adopting” it in another.
In this instance, we had an almost constant adjusted-for-inflation revenue stream from the top marginal earners from 1995 to 2009 (1995 being the last year the top marginal rate was adjusted). After the soak-the-rich bill was enacted, revenue from the top marginal earners dropped by 60%, while revenues from the remaining earners dropped by 5%. Pretty strong cause-effect correlation.
I can’t tell whether you’re being sarcastic or not, but the fact that corporations are stockpiling cash and not using it for investments or capital improvements, and that job creation is stagnant, would seem to suggest that a lack of capital investment at least correlates with a lack of job creation.
If “we” (I presume you mean the government) started spending on infrastructure, wouldn’t that be creating demand for products and labor?
You’re not seeing how circular your arguments are, so I should probably give up on you. You will believe what you want to believe.
Spending our way out of a recession is by no means universally regarded as the magic solution. Doing so either increases debt (if we decide not to pay for it) or decreases productivity (if we do, by taxation).*
*And if you think that increasing taxes increases productivity, well, then, we should tax them rich 100% to maximize productivity!
When did I sneer at it? You, on the other hand, dismiss statistics you don’t like because there’s no basis for comparison, and then happily cite others.
Yes. Certainly nothing else happened to the economy in 2009 that could account for it.
yeah that works so well every time its tried. It has been shown that FDR’s make work programs lengthened the depression. Keynesism was almost universally rejected in the 70s era stagflation. How well have all of our current spending and trillion dollar stimuluses / bailouts been working for you? Government spending does not create prosperity. It screws with price and other economic indicators and causes inefficiency in the market and wasted resources.
I know. It’s rather complicated, with multiple brackets, and the definitions of those brackets changing. And is it a tax cut if someone lowers rates a lot and then raises them a little?
But this thread is about who’s buying the argument about tax cuts. Regardless of the actual rates (and who changed them), the argument (under different phraseology) goes back more than 10 years.
The same could be said for any policy. What would’ve happened if we hadn’t waged what now looks like a disastrous war in Iraq? What if we hadn’t supported the mujahadin in the '80s. Here’s what we know: Since the tax cuts, unemployment has been on a fairly consistent rise and the 2% are wealthier than ever. We can’t know exactly what unemployment would be otherwise, but I’m not buying the argument that it would be even worse if the obscenely wealthy were slightly less obscenely wealthy.
That’s great in theory, but they’re not spending their capital. How long does the hording have to continue before you give up on this rubbish? You want to see them create jobs with their capital? Tax them at a fair amount and use that money on much needed infrastructure. Voila! Jobs.
Ask the U.S. Auto industry. The banking sector would’ve experienced a disastrous collapse. The recession would’ve turned into a full-fledged depression. Stimulus kept a hemhorrhage from becoming a bloodbath. Taking the Palin rhetoric won’t get you far.
