What you’re describing is a classic chicken and egg. Employers won’t hire because people aren’t spending money. People don’t have money to spend because employers won’t hire. This is the part the government plays. They break the gridlock through infrastructure spending that gives employers a reason to hire workers which, in turn, gives consumers money to spend which, in turn, increases demand leading to more hires and so on and so on. And it’s not like the public spending is otherwise unneccesary make-work. We have serious infrastructure problems that, if not addressed, will themselves become a drain on the economy.
Uh, no. You still don’t understand. Taxes reduce the cash available to purchase capital improvements and yes, the creation of new jobs.
You are making the elementary error of confusing wealth and income. States and the federal government in the US tax income, not wealth.
greenslime, you’re making the mistake of assuming that people who disagree with you don’t understand. We’ve all heard the theory, taxes mean less money for those wonderful wealthy people to give jobs to the great unwashed through the sheer goodness of their hearts. It just isn’t true.
I didn’t say that the companies deciding not to locate in Oregon had anything to do with the 60% revenue drop. It was caused by the highest earners moving their income-earning assets out of Oregon, and in many cases, changing residency.
In Oregon, income taxes are steeply progressive so it’s relatively hard to move from a higher bracket to one where the tax is significantly lower. In any case, the tax structure remained the same from 2008-2009 except for the soak-the-rich tax.
Your viewpoint and how you’ve expressed it strongly suggest a highly distorted way of looking at the subject: that of a populist hatred of the rich and a conviction that all their evil deeds are the primary cause of the current economic misery. If that’s not how you truly feel, I do apologize, but I suggest you restructure how you argue so that it doesn’t seem as if you are twisting facts because you have an ax to grind.
Your sarcasm aside, why isn’t it true? Can you show a correlation between high taxes and low unemployment? (I realize this would be a ceteris paribus comparison and therefore of limited value.)
Do you believe the converse, that the higher taxes are, the more jobs will be created?
Look, we have to get away from this hate-the-rich crap. Capital investment and job creation come from somewhere. If we say that higher taxation creates jobs, then that somewhere must logically be the government. Yet, the US government, though the single largest employer in the US, employs only a small fraction of all workers in the country; the private sector dwarfs the public sector.
You need to read Adam Smith. The evil rich don’t “give” jobs to the teeming masses. They purchase the masses’ labor, because that is a better way for the evil rich to make additional money than sticking it downstairs in the McDuck vault and rolling around in it. Benevolence (or evil nastiness) has very little to do with it.
Right now, the market for labor is lousy. Supply exceeds demand. To increase taxes on those who demand labor (the evil rich/corporations) would exacerbate the problem.
And yes yes yes yes yes, I know everyone’s view of the rich is that they all have immense piles of cash that they keep in the downstairs vault or in the Cayman Islands, etc. They don’t invest it, they just sit on it and cackle. They don’t really create jobs anyway. Blah blah blah. We move directly from that to a populist justification that since they’re not doing anything meaningful with their wealth, it’s OK to take it.
The breathtaking inanity of the rape-the-rich mentality is the assumption that after you rape them, they’ll be back next year to let you do it again. History has shown that the rich, being both intelligent and mobile, will move highly taxed assets to jurisdictions where taxes on such assets are lower. That makes them no-good stinkin’ bastards, of course, but it is what it is.
To turn the question around, there is no evidence that low taxes create jobs. You’ve had the lowest tax rates in history for a decade. Where are the jobs?
Progressives don’t hate the rich. We just don’t see kissing their collective ass as being the ticket to prosperity.
So, you think you’re right, you apologize in case you’re wrong, but you still think I right.
I still call bullshit. Back up what you’ve said about me or retract it.
Perhaps this might be instructive, slime. We call on everybody to make sacrifices for the good of the country. Some people even give up their lives for it. We consider people traitorous if they give allegiance or sell secrets to a foreign power. But not the rich. Those who have benefited so greatly from living can jump ship just to get a few more percentage points return on investment. And that sort of thing is to be expected apparently. It’s just sound business, really.
I don’t hate the rich. I just don’t believe that they deserve special treatment so they’ll continue to grace us with their presence.
That’s correct. They’re not investing it. Before 2000 we had higher taxes and lower employment, and less uninvested capital. Now, we have lower taxes, higher unemployment, and more uninvested capital. The simplest explanation for this is that lowering taxes does not create jobs.
The evil rich/corporations do not demand labor, their customers do. Corporations are middle men.
I don’t think so- they wouldn’t “demand” more labor if they had more money, unless they were selling more products. They would only “demand” more labor if customers were demanding more products- and then they would hire people and invest in capital improvements to keep up.
I would like a cite for the claim of 60% loss of revenue from the highest earners. I’m not adept enough to link while on my Droid, but looking at IRS data, one sees increasing year over year total revenue from the top earners (.1%, 1% and 5%) up until 2007, and then declines in 2008 and 2009.
It would be nice to have an answer that was free from the sneering implication of morality-based opposition to the rich, as well as misplaced claims for superior knowledge/education.
Additionally, it is of course patent nonsense to claim that FDR prolonged the Depression. The data simply don’t bear it out. For instance, the US set a new high GDP by 1936.
Cite? As I showed, Oregon tax revenue decreased less than many other states.
How progressive is “steeply progressive”? Given that state taxes are relatively low compared to federal ones, an increase significant enough to make people move would have to be pretty big.
Give a cite on how anyone in this thread “hates the rich.” Saying they should pay the tax rate they paid in the '90s is hardly hatred in my book. You should apologize to all of us.
Pretty sure they are creating jobs in China during that time.
We’ve had trickle down for 30 years plus now. It’s nice to pay less taxes, but it doesn’t create wealth for the masses or for tax revenues. I don’t want to go back to Eisenhower era marginal tax rates, but I do think that no tax should fall heavier on the poor than it does on the wealthy and that gradual marginal tax rates are fair.
Red herring. It is you who tried to draw a distinction between cash and capital. You keep repeating the same theoretical premise without acknowledging the fact that it’s been thoroughly disproven over the past 12 years. If you were right, we’d be awash in jobs.
I’m sure you recognize the connection between income and wealth.
I’m just glad you’ve stopped confusing corporate taxes with personal income taxes.
Yes, those companies had nothing to do with the revenue drop. I’m sure you just included it in that paragraph as a humorous aside.
At what point do you address the fact that the most prosperous decades in our history have had tax rates for the wealthiest earners that were higher or extremely higher than what they pay now? That as we’ve lowered their taxes over the past decade unemployment has steadily risen? That the last time taxes on the wealthy were this low, it was followed by the Great Depression. You keep talking about the theory behind your arguments while completely ignoring the reality.
Not to mention that companies deciding not to locate would result in revenue not increasing, not a revenue decline. And such things take a long time to happen, and probably wouldn’t affect revenue so rapidly in any case. Plus, no cite. Companies were reining in all sorts of spending at the time, it is quite possible that was the cause, not a tax increase that would hurt only the higher level execs. If they backed away from a move with good ROI because their personal taxes would increase, they should be fired for putting their interests ahead of those of the shareholders.
So, who hates the rich? Not us. but our friend says they are so stupid that they would invest in increased capacity without demand, and they are so greedy that they pull out of good deals because of their personal tax situation.
Not really no. The fundamental flaw in the logic that taxing high income will reduce investment in employees is that you only get taxed at this high rate when you take money out of your company to use personally. If you reinvest company profit in more employees and other business costs you don’t get taxed on it or taxed very little.
In fact the low personal income tax rate probably acts as a deterrent to investment in American industry, since taking a big chunk home with you is so attractive right now with the lowest tax rates on high earners in 100 years or more. Not to mention the low low personal gains taxes that promote gambling over building businesses.
The wealthy are also the people who spend the most of their money on foreign products and services. Foreign homes, automobiles, artwork, vacations, boats, ect ect.
To get money to be spent here you need to incentivize insourcing, incentivize the lower and middle classes to spend (by promoting a business climate to employ them and promote a feeling of security through safety nets) and government spending certainly doesn’t hurt. How government money is spent is a nuanced issue, but in a basic sense it helps drive the economy very efficiently.