That is exactly how the republican party uses the term. That is why there is contention. The tax against the rich has been called a tax against the "job creators’ deliberately and Luntzianly. The amazing thing is the rightys buy it. The rich have had tax cuts steadily since Ike. So we should be ass deep in jobs.
I object to the use of the word “create”.
It does imply that the business owner generated a job in a vacuum, independent of the consumer or any other force.
Sorry I’m late to the party, but I thought the push was to raise the individual income taxes? Job creator or no, rich or poor, how is it that a change in the individual income tax rate would affect the profitability of a business?
You aren’t taking cost of capital into account. The difference between keeping 72% or keeping 75% can be the difference between an investment with a return below or above the business owner’s cost of capital.
FI, seems like a fairly standard use of “create” to me, and I don’t see that implication at all.
ROVER is sure stubborn.
Luntz is the originator of most of the propaganda terms the Repubs use. Increasing taxes to the wealthy, who have had lots of tax cuts, was what the argument was about. The Repubs renamed the rich as "job creators’. They did it in every speech in the house and senate. They did it all over TV . They repeated it over and over.
Demand does not cause hiring, but it is done as a response to it? Well Duh. No matter how you slice it, the demand caused the businessman to hire. He would not have done it without the demand. That was one shitty argument after another.
Gonzo, you are right that a businessman won’t hire without demand. But you are missing that he won’t hire just because of demand either. He will only hire if it is profitable to do so. Raising taxes could make it not profitable for any particular businessman to hire (thus reducing the number of new jobs when applied across society).
Are you talking about the owner’s personal income taxes, the employee’s income taxes, or the business’s corporate income taxes?
The right/Republicans have created this term “job creators” to refer to the wealthy. This term is used in reference to arguments as to whether or not these people should have their marginal tax rate increased slightly. The argument goes that we should not take any money away from these folks, as they are the “job creators”, and any money taken from them would therefore result in fewer jobs.
Now it seems to me that in general, everyone is in agreement that the “creation” of a job depends on both demand for a product or service from the consumers, plus the delivery of the product or service from a business.
In addition, the “creation” of a job requires both the person willing and able to do the job, as well as the person/business who advertises for a person to fill a role within the business.
There is, therefore, no one person or identifiable group that we can point to and say “there is the job creator”.
The Republican framing of the debate about raising the marginal tax rate on those making lots of money as “attacking the job creators” is therefore bullshit.
Well, for businesses held through sole proprietorships, partnerships, and S corporations, I’m talking about personal income tax rates (because those are the rates at which the income from those businesses is taxed), and for businesses held through corporations I’m talking about the corporate income tax rate.
If taxes and regulations are so onerous that he can not hire new people when there is excess demand, they how does he keep his doors open? The conditions that effect new hires, would also effect the old.
So onerous taxes and regulation are actually a different argument. One about whether a business can exist in such a climate. That is separate discussion from demand. It also is not pertinent to the term “job creators” discussion.
EP, I agree that maybe a better term would be “job opening creators” because you are of course right that it takes tow to tango–there’s really no job if there’s not an employee to fill the position. But that term doesn’t have much of a ring to it, and we can assume with today’s unemployment that the vast majority of job openings would be filled. Also, you are just quibbling about a side issue and not grasping the central point that raising taxes can make it unprofitable for a business owner to expamd and create a job opening.
How does the owner’s personal tax rate determine how many employees are hired? Presumably, employees are hired to meet demand, which increases income. If they weren’t hired, the owner would lose their productivity, and the income it produces. If his income rises from the labor of the employee, his tax rate is pretty irrelevant; he makes more money with the employee than without. The tax rate only determines the amount of profit from the labor of the employee. The only variable is, “does demand justify the employee?”
Once again, it boils down to demand, not tax rates.
Considering how much capital is available, can we also assume that the vast majority of consumer demand has already been met?
Well, again, you aren’t taking into account cost of capital and the business person’s decision about how much they want to make from new investment. Taxes decrease the amount the owner gets to take home–at some point that amount for any particular investment may no longer be high enough for the owner to want to make the investment.
And that’s just the simple first-order effect. Broader effects include contributing to uncertainty (ie, the owner may not want to make new investments out of a fear that taxes will be raised) and encouraging tax-avoidance behavior. Combine all this and he increase in tax rates may not operate to actually increase taxes paid at all.
Is this a new standard business has adopted? Because taxes haven’t been this low in over 50 years, yet we have had some periods of very robust economic growth since then, even with much higher tax rates than we have now. Did business owners of the past not care as much about profit? Or is it that today’s business owners would rather improve their bottom line, not by working harder than their competitor, but by paying less and less for the abundant government services that enabled them to do business first place?
We certainly don’t want to encourage tax-avoidance behavior! Next thing you know, somebody would set up a business that specializes in tax avoidance! You may well think that no one would stoop so low.
Money has never been cheaper. Cost of capital is trivial. “Safe” investments don’t pay squat. There really is no reason not to invest in expansion and new business except for lack of demand, which is not affected by tax rates.
Ok, here’s the problem with this “every single job was actually created by someone” mentality: it’s indicative of this false Randian belief system that so many conservatives cling to that the primary driver of economic progress is stalwart noble industrialists who build companies with nothing but the sweat off their brow.
It simply isn’t true. Sure, you might be able to produce a handful of examples that seem to fit that ideal, but at the end of the day that way of thinking is overly simplistic about economics. And the people who adhere to it generally don’t understand economics. They took Econ 101 and learned the simple mechanistic model presented there and bought it lock, stock, and barrel. But the map isn’t the territory. People don’t immediately change their shopping habits when a store raises their prices by 1%, nor do wealthy people suddenly start new companies for no reason other than they find a bit of extra cash in their bank account. In the real world things are much more complicated than that.
By analogy, look at physics. If you take Physics 101 you’ll learn all the Newtonian mechanics, and even do simple experiments that allow you to use the formulas you’re learning. And everything seems neat and tidy. But the reality is that Newtonian mechanics isn’t an accurate picture of how the world works, it’s just a useful model that works in some situations but completely falls apart in others. It would be a mistake to base your world view on it.
Now back to “every single job was actually created by someone”. Here’s an example: Some accounting department at Microsoft has had their workload growing slowly over the last couple of years, and after making multiple requests to hire a new person, this is finally approved. Who created that job?
- The manager of that department, the one who made the request to hire the employee
- Their boss, who approved the request
- Their boss’ boss, who approved the budget that included the new employee’s salary
- Someone further up the line, up to and including Steve Ballmer, CEO of Microsoft
- Bill Gates and/or Paul Allen
- The members of the teams that made the products that led to the increased revenue
- The college professors who taught the engineers who developed the project
- The dean of the university that hired those professors
- Whatever vice presidents and/or directors who approved development of those products or otherwise set the policy direction that led to its development
- The customers who bought the products
- Someone else
I’m extremely curious what your response will be.
And the question of capital itself, which is the real axis upon which the issue turns. We are offered that “job creators” risk their capital, and thereby create jobs. So far, so good. But the purpose is not to create jobs, that may be an unintended consequence, but it is not the purpose. The purpose is to make money, increase capital. So, really, its just money making more money, but acting through an intermediary. Like a virus.
Then it follows that in strictly economic terms, the host is irrelevent. He or she is merely the conduit through which money flows to reproduce. If we were to simply replace the rich guy with an educated committee, dedicated to assisting the money in its quest, the result in terms of “job creation” would be the same. Save that the committee might be on salary, civil servants perhaps, with much less discretion on matters like the allocation of funds, i.e., hookers, blow, yachts, Heritage Foundation…
So, even if the “job creators” function exists, rich people are a very inefficient means to that end. Not necessarily suggesting anything, mind you. Just sayin’, is all.