The Bullshit term "job creators"

[Voyager]

@Rand_Rover

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.

Fine. Now, when a business owner is thinking about the investment, what is the certainty of the rate of return? He may write something down, one number, but in fact there is a large variance as to what is expected. In addition, across investment opportunities.
Many expected returns are going to be so low that they won’t happen at all, taxes or no taxes. Others are so high that the impact of a small increase in the tax rate is going to be trivial. A few might be on the borderline, but that is always the case.
As lots of people have mentioned, our historically low tax rates mean that according to your theory there should be a boom in investment as more possibilities cross the RoI threshold. However, the poor demand climate means that expected returns are way down (taxes or no taxes) and that lowering taxes further would have a tiny impact.
If lowering taxes decreases demand by cutting jobs and benefits which get spent, it could make the situation even worse. Likewise, if increasing taxes increases demand, it could make far more opportunities profitable than are lost. Unless you have some data that there is a massive wave of investments just waiting to be made with a slightly higher rate of return, I’m not convinced that lowering taxes will help at all, and certainly not in a major way. Hell, usually returns have to beat the discount rate, and that is trivially easy these days. Why would lower taxes help when lower interest rates don’t?

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.

If anyone was talking about doubling taxes, this might be valid. To turn it around, if the right is talking about lowering taxes more, doesn’t that also depress investment because businesses want to wait until they see if it happens? However, if someone is so chicken shit that they pass up a great opportunity in case taxes on big profits go up a slight amount, they have no business making such decisions. That source of uncertainty is tiny when compared to the other ones.

[UltraVires]

@Voyager

Many expected returns are going to be so low that they won’t happen at all, taxes or no taxes. Others are so high that the impact of a small increase in the tax rate is going to be trivial. A few might be on the borderline, but that is always the case.

That sums up my position in a nutshell. If you raise taxes, those few jobs on the borderline will not be created. That’s all I have said, and it really is basic economics: taxes are a necessity, but they also reduce market efficiency. Therefore be very careful about raising taxes. (And God forbid have a small government which requires fewer taxes)

At least mention the market inefficiency without a hand waiving about how businessmen can afford it. Some might be able to afford to take a loss, but they damned sure aren’t going to out of the goodness of their heart. They will pass on that opportunity so that no job is created. Nobody on your side of the debate will acknowledge that.

Many keep squawking that it’s only 3%. Fine, but that 3% will be the go/no-go difference in many investors’ choices on whether to proceed.

[Rand_Rover]

@elucidator

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.

Uh . . . wow. Soviet Russia called, they want their economic policy back.

Seriously dude, your ideas have been and are currently being tried–they have failed and are currently failing. I’ve said it before and here I go again: stick to your little snarky drive-by posts, bub–anything more “substantive” and your idiocy really comes shining through.

I agree with jtgain above, and I’m going to take a break from this thread. I think I’ve made my point and it’s just getting more and more ridiculous in here. No doubt many of you will think that my non-response to your last posts means that I have no response, and I’m OK with you thinking that.

[Fear_Itself]

@jtgain

Many keep squawking that it’s only 3%. Fine, but that 3% will be the go/no-go difference in many investors’ choices on whether to proceed.

“Many” investors? That is such a nebulous estimate. We don’t need to preserve Every. Single. Job. investors may or may not “create”, at the expense of the growth to the greater economy from targeted stimulus, that more than offsets those lost from a few timid investors.

[Fear_Itself]

@Rand_Rover

I think I’ve made my point and it’s just getting more and more ridiculous in here. No doubt many of you will think that my non-response to your last posts means that I have no response, and I’m OK with you thinking that.

So long as you are thinking about us…

[gonzomax]

Rover has no argument. he is racking his brain to think of something that will fit his preconceptions. There is no evidence and no data to support him. But as usual, he says it makes sense to him, therefore it should make sense to you. Only he is wrong, There is nothing to back him.
Business is sitting on about 3 trillion dollars and financial pros are begging them to let go.
Rover uses this board to practice lawyerly argumentation. Lately he has been on a losing streak.

[elucidator]

@Fear_Itself

So long as you are thinking about us…

Wow, he sure clobbered us this time, didn’t he? Just whipped the living tar out of us, such probity, such brilliant…what?

Oh, don’t worry, he’s gone, he won’t ever know. Not one of those ego starved guys, gotta find out if anyone is talking about him…

[Rand_Rover]

gonz–wrong again, bub, as per usual. I’m abandoning this thread because luci’s post made me realize who I’m talking with. There’s just no amount of talking sense to you people that is ever going to get past the emotional attachment you have to the way you think the world works.

[Rand_Rover]

@elucidator

Wow, he sure clobbered us this time, didn’t he? Just whipped the living tar out of us, such probity, such brilliant…what?

Oh, don’t worry, he’s gone, he won’t ever know. Not one of those ego starved guys, gotta find out if anyone is talking about him…

:rolleyes: I figured I would be honest and open about abandoning this thread instead of just slinking away and never replying. But, like I said, count it as a victory if you must (and really, who could blame a guy like you for looking for any little victory in life that he can?).

[Fear_Itself]

No! Don’t leave! I was going to make espresso!

[Euphonious_Polemic]

I was waiting for the proof that tax cuts lead to increased jobs. Sort of the smoking gun in the argument. You know, like how Bush’s tax cuts for the wealthy led to some of the lowest taxes ever for this group and naturally to the surplus of jobs we see today. Rather than the old “well it should work according to this theory I have here”

[Fear_Itself]

@Euphonious_Polemic

I was waiting for the proof that tax cuts lead to increased jobs. Sort of the smoking gun in the argument. You know, like how Bush’s tax cuts for the wealthy led to some of the lowest taxes ever for this group and naturally to the surplus of jobs we see today. Rather than the old “well it should work according to this theory I have here”

Oh, that is easy. In 2008, big business realized Obama might be elected, and they became uncertain, which is the Achilles heel of capitalism. If investors aren’t ensured of a slam dunk, their coin purse snaps shut, and the economy shits the bed.

It’s Obama’s fault.

[Evil_Captor]

@Rand_Rover

Uh . . . wow. Soviet Russia called, they want their economic policy back.

Seriously dude, your ideas have been and are currently being tried–they have failed and are currently failing. I’ve said it before and here I go again: stick to your little snarky drive-by posts, bub–anything more “substantive” and your idiocy really comes shining through.

It’s YOUR ideas that are failing, big time. IF THERE WAS ANY JOB CREATION BY LOWERING TAXES ON THE RICH, it would have happened in the last 30 years, wouldn’t it? but it hasn’t, jobs have been exported, salaries have gone down, the ONLY people who benefit by lowering taxes on the rich are the RICH!!! Got it?

[PigArcher]

@Rand_Rover

:rolleyes: I figured I would be honest and open about abandoning this thread instead of just slinking away and never replying. But, like I said, count it as a victory if you must (and really, who could blame a guy like you for looking for any little victory in life that he can?).

So not going to reply to my hypothetical about who “created” a low-level accounting job at Microsoft? Figures. You lost this thread the moment you acknowledged that not all rich people are “job creators” and middle class people can also be “job creators”. Without those assumptions, there is no job creation based justification for lower taxes on the rich.

[Voyager]

@jtgain

That sums up my position in a nutshell. If you raise taxes, those few jobs on the borderline will not be created. That’s all I have said, and it really is basic economics: taxes are a necessity, but they also reduce market efficiency. Therefore be very careful about raising taxes. (And God forbid have a small government which requires fewer taxes)

Tax money is not being burned. If your precious small government is not keeping up infrastructure, and thus causing all sorts of economic loss, it is not helping the economy. If it pays so little for education that it is creating a class of low income hard to employ workers, it is not helping the economy.

At least mention the market inefficiency without a hand waiving about how businessmen can afford it. Some might be able to afford to take a loss, but they damned sure aren’t going to out of the goodness of their heart. They will pass on that opportunity so that no job is created. Nobody on your side of the debate will acknowledge that.

Please explain how business taxes change a profitable investment into a losing one? Those who think business tax cuts are going to magically create jobs are the ones thinking businesses hire people out of charity. Greater demand causes jobs. Yeah, someone has to decide to hire, but if your employees are swamped and you are losing business because of lack of staff, it doesn’t take a rocket scientist to figure out that you need to hire.

And, please address why lower interest rates, which are a more significant driver of investment, is not doing the job, and why you think a lower tax rate will work? Investment decisions are not made in a vacuum. You need to beat alternate uses of the money. If you can get only 1% instead of 5%, clearly more investment decisions make sense.

Many keep squawking that it’s only 3%. Fine, but that 3% will be the go/no-go difference in many investors’ choices on whether to proceed.

Cite on “many” please. As I mentioned, and you ignored, there is a lot of uncertainty about returns. In fact, if a tax increase tends to push money to higher yielding investments, it will be good for the economy as a whole.

[elucidator]

@Rand_Rover

gonz–wrong again, bub, as per usual. I’m abandoning this thread because luci’s post made me realize who I’m talking with. There’s just no amount of talking sense to you people that is ever going to get past the emotional attachment you have to the way you think the world works.

Its a rather straightforward observation, isn’t it?

Guy has a great business idea, say, a lemonade stand. He could be a job creator! But he needs to buy lemons. So, he goes to Rich Guy, and Rich Guy invests his money. So, Rich Guy participates in job creation. Of course, if Rich Guy does not actually have the money, he cannot so participate.

So maybe lemonade entrepreneur goes to the bank, and bank loans him the money. Or he goes to the Small Business Admin, and gets the money. Or he gets together a bunch of investors, and gets the money.

The only consistent factor here is: the money! The money makes the job creation possible.

Now, what if that money were not concentrated in a small set of hands, what if it were disbursed more evenly? Well, then, the possibility of gathering a group of smaller investors becomes much more likely, doesn’t it? if its a good plan, a good investment, then they would benefit, no?

So, really, even if the rich were job creators (a proposition you have yet to support) it would only be because thay have a disproportionate amount of money to begin with.

As to the failure of the Soviet economic model, one might point out that they had just recently endured a destructive war and an even more destructive revolution, with a hostile world eager to see them fail. A daunting prospect. The wonder isn’t that they failed, the wonder is that they survived at all.

[septimus]

@Voyager

Tax money is not being burned.

True, that. But you’d never know it from right-wing rhetoric. Money spent by the super-rich on private jets, hookers and blow is a Godly gift to help the inferior classes bloom, while tax moneys spent on schools, road repairs, or even disaster response is reprehensible theft and a waste.

@Voyager

In fact, if a tax increase tends to push money to higher yielding investments, it will be good for the economy as a whole.

Higher corporate taxes in particular tend to increase employment, simply because taxes and salaries are deductible. Studies confirm this.

In fact, Googling produces lots of studies and graphs refuting the GOP claim that low taxes are helpful, e.g. higher marginal rates--> lower unemployment
(Out of curiosity, have those in this thread arguing for the “job creation” hypothesis linked to any studies, or is theirs just a religious dogma?)

[Voyager]

@septimus

True, that. But you’d never know it from right-wing rhetoric. Money spent by the super-rich on private jets, hookers and blow is a Godly gift to help the inferior classes bloom, while tax moneys spent on schools, road repairs, or even disaster response is reprehensible theft and a waste.

Federal money helped pay for improvements to the freeway I take to work. Thanks to them, I (and thousands of others) get to work faster, so I have my high priced ass in the chair making money for my company for more of the day.

Higher corporate taxes in particular tend to increase employment, simply because taxes and salaries are deductible. Studies confirm this.

In fact, Googling produces lots of studies and graphs refuting the GOP claim that low taxes are helpful, e.g. higher marginal rates--> lower unemployment
(Out of curiosity, have those in this thread arguing for the “job creation” hypothesis linked to any studies, or is theirs just a religious dogma?)

I’ll have to look them up. I would also like to respond to how much RoI decreases (or increases) with tax changes, which got implied above. A 3% tax increase does not result in a 3% decrease in return.
Consider a $1 million investment returning 10% before taxes, and an initial 30% tax rate. The $100K profit gets reduced to $70K through taxes, which results in a 7% RoI. Now, consider a 3% increase in taxes. That reduces the profit to $67K, or just a 0.3% decrease in RoI. Decreasing taxes 3% produces only a 0.3% increase. That is unlikely to affect any rational managers decision very much. In the real world, this is in the noise.

[Plumbkrazy]

@Euphonious_Polemic

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.

I love this post. The wealthy are concerned about what amounts to a 3% hike in their tax rate. Three fucking percent.

[gonzomax]

@Plumbkrazy

I love this post. The wealthy are concerned about what amounts to a 3% hike in their tax rate. Three fucking percent.

AS BRICKER likes to point out, there must be a level somewhere where taxes will be too high to encourage businessmen to stay open.
Of course the top tax rate in Ikes time was over 90 percent. There were lots of businesses being created, so that was not too high. But 35 percent is a magical number that will have owners sobbing in their cut glass Champaign glasses nowadays.
We are no where near a high tax rate for wealthy or businesses.
Profits are at all time highs. There is lots and lots of room before the rich should even care.
But they are motivated by absolute unbridled greed. They never have enough.