We have a very low tax rate on the wealthy currently. Where are all the jobs?
That said, in a more normal economy where investors and companies are not sitting on trillions in capital, it might be the case that increased taxes would prevent some jobs from being created due to capital return calculations. But it could equally help jobs get created either by creating confidence in the government’s financial situation or by investing wisely in common goods such as infrastructure.
So it is not necessary to disclose that it will cost jobs because it is not a given that it will. And it definitely won’t right now, because tax rates are already at near-historic lows and we’re not seeing all this imaginary investment taking place.
I note that when the economy is going well and revenues are up, “we have a surplus! let’s reduce taxes!” When the economy is going poorly and revenues are down, “we have to create jobs! let’s reduce taxes!” When the same measure is your solution to opposite situations, it may be time to rethink things.
Anyway, fair’s fair; if they’re going to get called job creators, we should call workers “wealth producers.”
Tell the truth now, did you read past my first sentence? I did qualify my statement indicating that I agree there’s a role for both demand and an individual in creating a job. Where exactly did I posit what you seem to suggest I posit?
Again, just to make sure you don’t miss it in this post, I’m not saying that demand by itself is causing a job to be created. Maybe you’re arguing with someone else and have just happened to quote me? Either way, since you seem to be having trouble reading what I post, I’ll clarify my position:
If there is no “job creator”, someone else will come along to fill the niche. It’s possible that no one will, but are you really trying to convince me that this is a common occurence? Do our job creators really just suck at doing just that? I guess you wouldn’t have to do much to convince me that’s the case. On the other hand, if there is no demand, there is no job (excepting nose puppies). Following this, demand is far more important for the creation of a job than anyone who is in such a position to “create” one.
Someone MAY fill the niche if it is profitable to do so. Raising taxes and increasing regulation may make it unprofitable to do so. This is the whole idea with discussing job creators–we don’t want to make it unprofitable to fulfill demand because if we do then everyone is worse off.
I’ve always thought the ‘demand creates jobs’ side of this debate is referring as much or more to businesses that already exist as new ones.
Say demand for cars goes up. New car companies don’t have to spring up to meet it. The people who already work for car companies go from working part-time to full-time. Having more money and less time, they get their sandwiches from restauants instead of making them themselves. So the sandwich shops increase hours as well. The sandwich makers have more money for downloads or whatever they spend their money on and so on… pretty soon the companies that already exist have to hire more people. Those new hires quit sucking tax dollars and spend the money they earn and join the virtuous circle. They contribute more tax dollars, we support solar power companies that can turn a profit, global warming is averted and everyone is happy again.
Yah sure new companies spring up, but aren’t we talking about demand for goods and services that are mostly already out there?
For those arguing that investors and businessmen deserve all the credit for creating jobs, can we also give them all the blame for the dearth of jobs we’ve had over the past few years?
It’s not that they suck at doing it. It’s a case where taxes and regulations might make it impossible. So, let’s take our hypothetical sandwich shop. I see the demand there because Stimulus II puts money in everyone’s pockets and market research shows that people are clamoring for a sandwich shop.
Demand only exists at a certain level. I don’t care how good my sandwiches are, nobody will pay $25 for one. People might pay $8.
So I look into it, and I can swing a small business loan and get some start up capital. I can make money if I can hire 4 people and pay them $10/hr.
But wait, you just raised capital gains taxes, so now I can only make money if I pay them $9/hr. Now the city enacts a new health law that says I need to install a super duper sanitizer that will keep everyone “safe” because, after all, millions die in this country from food poisoning.
So, my costs went up more. I can only pay my employees minimum wage.
But wait. In 2014, I’m going to have to offer health care benefits! Sure, I would like to provide that, but they are sandwich shop employees and the market doesn’t support that type of wage because people will only pay so much for a sandwich. No matter, says Obama, I must do so. How much will that cost? I don’t know. The President is talking about making me pay my “fair share” so my taxes might go up more.
As I think about it, I might lose my shirt in this deal. What happens when Stimulus II goes away next year? Will people still want my sandwiches which would have to be a minimum of $14 (if my WAG about my future costs is correct) for me to make a profit?
Now is not the time. I’m not going to build the sandwich shop. Someone else will, you say? No. They will look at the same numbers that I just did.
You appear to making an argument that enforcing food being safe has costs. So what? No one wants a botulism sandwich.
So let me get this straight. You’re claiming you can’t start a business unless you deny your workers healthcare insurance, AND pay them a wage where they can’t afford it themselves?
If they get sick* do you want them to die in the street, or get bills they can’t pay, passing the cost on to everyone else?
*probably from your food, which you feel you can’t afford to follow sanitary regulations
Ahh so sandwiches only happen if you can exploit the poor and make everyone sick.
Me, I’m kinda stuck about the part where raising the capital gains tax means “now I can only make money if I pay them $9/hr.”. One of us rather severely misunderstands the thrust of a capital gains tax.
Here’s the thing: if the economy doesn’t allow for a certain service or product to be produced without one or more of the following:
-Health violations
-Worker exploitation
-Ignoring tax laws
Then maybe, just maybe, it’s not a viable business option in such a case? Maybe the problem isn’t that the government requires you to give your workers options beyond “bearly scrape by at the minimum of existence with no insurance whatsoever”. Although your example leaves me wondering how Subway could ever afford to operate (let alone thrive) in Germany.
It is possible that increasing taxes and regulation might make a business less profitable. But unprofitable is likely incorrect.
Profits have been at historic highs while wages have dropped and productivity =has accelerated. There is plenty of room in the profit sector.
I think the central pronlem with the demand side people in this thread is that you focus only on what exists now and think that it is inevitable. So, you see Starbucks, and you think it exists only because of the demand for its products, and if the actual founder of Starbucks hadn’t created it, then someone else inevitably would have. So, the founder is just feeding at the trough of the excess value created by his workers (a trough that someone else would be feeding at if it weren’t this guy), so it’s OK to increase taxes on the founder because he’s not really doing anything.
Before I continue, does that sound right?
What it sounds like is you framing the question in the best possible light for your viewpoint. You then offer for us to accept this as a premise to an argument. An established fact. This is very close to the fallacy known as “buggering the question”.
No, the central problem with the demand side people in this thread is that they’ve let themselves be suckered into a debate on economic theory which is utterly irrelevant to the premise of the thread.
