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Why are some people so sure that tax cuts for the wealthy will create jobs? It's an argument that never made sense to me. Suppose you're a business and the government decides to lower your taxes. Are you just going to run out and hire someone because you got a tax cut? What if you're already meeting customer demand for your products and don't need another worker? What if you see that people aren't spending and you're worried they may cut back on purchases of your products, in which case you may have to cut back on production? Are you still going to hire someone? I doubt it.
What about high-earning individuals? How does cutting their taxes create jobs? I have a friend who's a radiologist. He makes around 500K a year. By his own admission, he doesn't need a tax cut. If he were to get one, he wouldn't go on a spending spree. Why? Because he has everything he needs. In general, people in the top 2% aren't big spenders. That's probably one reason why they have so much wealth. So if you give them a tax cut, it's not as if a lot of that money will find its way back into the economy. And I'm pretty sure my friend wouldn't use that money to hire someone since he doesn't need to. So again, the tax cut doesn't help create jobs.
Historically speaking, our corporate tax rates are pretty low. But imagine if they were as high as 90%. Now you have a greater incentive to reinvest them back into your business so that it doesn't get recognized as a profit. Maybe you invest in a new CRM system for your company, build a new factory, send your employees to training to increase their productivity, or hire more workers. Whatever you do, you won't get taxed on it since it's not income. Notice how the higher tax rate is more likely to lead to job creation? It's a paradox the supply-siders either don't get or pretend not to see.
What I find interesting is the people who have so much faith in businesses to do the right thing are the same people who have so little faith in their fellow man. They look at the people collecting unemployment and assume they're just gaming the system. But when it comes to businesses, they're honest. It's not like they use a tax cut on other things like say donating to their favorite political candidate, the one who then pushes for even more tax cuts on businesses.
It still amazes me that the people at the bottom, many of whom can't find work, still think the money at the top will trickle down to them. You'd think the last 30 years would've shown them that it doesn't happen.
Yeah, why wouldn't they just pocket the money? There's only a hope that they will. And the ones who typically make this argument are the rich, business owners themselves, or the poor, steadfast conservative types that still believe that the money will trickle down to them. They're right, to an extent. Money will trickle down to them, very slowly and in small amounts.
And I don't want to hear, "Well, it's their business, so they've earned it", because though they have certainly earned their cut, a lot of additional profits are an indirect result of efficiencies/improvements made in the middle or at the bottom, not by the executive level. As a matter of fact, it's been researched and concluded before that many of the ideas that improve efficiency, products, etc., come from the bottom, not the top. I will post that article when I have time to look for it.
Now think of this. The tax cuts have been around for awhile. So what happens if they are taken away? Knowing how businesses operate do you think they will just absorb the increased expense or look for ways to make it up? And if they are looking for ways to make it up what do you thnk the chances are it will come in the form of reduced employee expenses?
Why are some people so sure that tax cuts for the wealthy will create jobs? It's an argument that never made sense to me. Suppose you're a business and the government decides to lower your taxes. Are you just going to run out and hire someone because you got a tax cut? What if you're already meeting customer demand for your products and don't need another worker? What if you see that people aren't spending and you're worried they may cut back on purchases of your products, in which case you may have to cut back on production? Are you still going to hire someone? I doubt it.
What about high-earning individuals? How does cutting their taxes create jobs? I have a friend who's a radiologist. He makes around 500K a year. By his own admission, he doesn't need a tax cut. If he were to get one, he wouldn't go on a spending spree. Why? Because he has everything he needs. In general, people in the top 2% aren't big spenders. That's probably one reason why they have so much wealth. So if you give them a tax cut, it's not as if a lot of that money will find its way back into the economy. And I'm pretty sure my friend wouldn't use that money to hire someone since he doesn't need to. So again, the tax cut doesn't help create jobs.
Historically speaking, our corporate tax rates are pretty low. But imagine if they were as high as 90%. Now you have a greater incentive to reinvest them back into your business so that it doesn't get recognized as a profit. Maybe you invest in a new CRM system for your company, build a new factory, send your employees to training to increase their productivity, or hire more workers. Whatever you do, you won't get taxed on it since it's not income. Notice how the higher tax rate is more likely to lead to job creation? It's a paradox the supply-siders either don't get or pretend not to see.
What I find interesting is the people who have so much faith in businesses to do the right thing are the same people who have so little faith in their fellow man. They look at the people collecting unemployment and assume they're just gaming the system. But when it comes to businesses, they're honest. It's not like they use a tax cut on other things like say donating to their favorite political candidate, the one who then pushes for even more tax cuts on businesses.
It still amazes me that the people at the bottom, many of whom can't find work, still think the money at the top will trickle down to them. You'd think the last 30 years would've shown them that it doesn't happen.
You may be correct, or you may be wrong. I'd like to see an unbiased, peer reviewed analysis of this - probably already has been performed at some grad school somewhere or as an MBA project.
Now think of this. The tax cuts have been around for awhile. So what happens if they are taken away? Knowing how businesses operate do you think they will just absorb the increased expense or look for ways to make it up? And if they are looking for ways to make it up what do you thnk the chances are it will come in the form of reduced employee expenses?
Which is part of the problem with cutting corporate taxes in the first place. Now you've made it easy for them to say "well you can't raise my taxes or else I'll have to pass it onto my customers or let go of my workers." Right. So a company who can afford to pay their CEO millions and millions per year in salary suddenly has to cut salaries and/or slash jobs at the bottom in order to make up for a tax hike? BS. Seems like trickle down only works in the negative sense. Cut corporate taxes and the tax savings stay at the top. Raise corporate taxes and the executives have no problem passing on those costs to someone down the food chain. Funny how that works.
BTW, these tax cuts that businesses are complaining about expiring? The rates would simply go back to what they were in the 90s and from what I recall, businesses were doing pretty good back then despite the higher rates. So there goes the argument that higher rates will hurt businesses. These companies are sitting on loads of cash. I'm pretty sure they can afford to pay more in taxes without having to cut salaries or lay people off. It's just political. Oh look at the big bad government. They forced me to fire my factory workers by raising my taxes. Boo hoo. Never mind that I'm still getting paid millions and millions even though my company is performing badly.
You may be correct, or you may be wrong. I'd like to see an unbiased, peer reviewed analysis of this - probably already has been performed at some grad school somewhere or as an MBA project.
What am I supposed to provide proof of? That tax cuts don't create jobs? I don't have to prove that. The burden of proof is on the people who claim they do create jobs. So far, I have yet to see anyone provide the evidence to back it up.
Which is part of the problem with cutting corporate taxes in the first place.
It doesn't matter what side of the argument you are on with this I think we can agree that ship has already sailed. Also keep in mind the tax cuts wouldn't only hit the large companies. 250K would also impact much smaller businesses. They would find it much harder to absorb the costs.
Now think of this. The tax cuts have been around for awhile. So what happens if they are taken away? Knowing how businesses operate do you think they will just absorb the increased expense or look for ways to make it up? And if they are looking for ways to make it up what do you thnk the chances are it will come in the form of reduced employee expenses?
I know- if the wealthy don't get to keep their tax cuts, they might do things like cut payroll expenses by sending thousands and thousands of jobs overseas, or just eliminating other jobs altogether. We can't have that now, can we?
To answer the OP's question- they don't. Trickle-down economics is one of the biggest scams ever perpetrated on the people of this country. Our elite wealthy class are nothing but parasites who take, take, and take some more while giving back nothing, and the whole "creating jobs" canard is just one of the ways they justify stealing other people's money. We've been doing this "tax cuts" thing for 30 years and in that time the middle class has been decimated (while the wealthiest have made out like the bandits they are). Those two things are not coincidental.
I know- if the wealthy don't get to keep their tax cuts, they might do things like cut payroll expenses by sending thousands and thousands of jobs overseas, or just eliminating other jobs altogether. We can't have that now, can we?
To answer the OP's question- they don't. Trickle-down economics is one of the biggest scams ever perpetrated on the people of this country. Our elite wealthy class are nothing but parasites who take, take, and take some more while giving back nothing, and the whole "creating jobs" canard is just one of the ways they justify stealing other people's money. We've been doing this "tax cuts" thing for 30 years and in that time the middle class has been decimated (while the wealthiest have made out like the bandits they are). Those two things are not coincidental.
Here's an idea to remedy this. Don't buy their ****, especially if you don't have the money. Everyday I see people in debt or who make less than I do playing around with expensive smart phones, driving around in luxury sedans/SUVs, buying video game consoles, buying large homes they can't afford, etc. The elites may be parasites, but we're allowing them to suck us dry by buying all their stupid, useless ****.
Why are some people so sure that tax cuts for the wealthy will create jobs? It's an argument that never made sense to me. Suppose you're a business and the government decides to lower your taxes. Are you just going to run out and hire someone because you got a tax cut? What if you're already meeting customer demand for your products and don't need another worker? What if you see that people aren't spending and you're worried they may cut back on purchases of your products, in which case you may have to cut back on production? Are you still going to hire someone? I doubt it.
What about high-earning individuals? How does cutting their taxes create jobs? I have a friend who's a radiologist. He makes around 500K a year. By his own admission, he doesn't need a tax cut. If he were to get one, he wouldn't go on a spending spree. Why? Because he has everything he needs. In general, people in the top 2% aren't big spenders. That's probably one reason why they have so much wealth. So if you give them a tax cut, it's not as if a lot of that money will find its way back into the economy. And I'm pretty sure my friend wouldn't use that money to hire someone since he doesn't need to. So again, the tax cut doesn't help create jobs.
Historically speaking, our corporate tax rates are pretty low. But imagine if they were as high as 90%. Now you have a greater incentive to reinvest them back into your business so that it doesn't get recognized as a profit. Maybe you invest in a new CRM system for your company, build a new factory, send your employees to training to increase their productivity, or hire more workers. Whatever you do, you won't get taxed on it since it's not income. Notice how the higher tax rate is more likely to lead to job creation? It's a paradox the supply-siders either don't get or pretend not to see.
What I find interesting is the people who have so much faith in businesses to do the right thing are the same people who have so little faith in their fellow man. They look at the people collecting unemployment and assume they're just gaming the system. But when it comes to businesses, they're honest. It's not like they use a tax cut on other things like say donating to their favorite political candidate, the one who then pushes for even more tax cuts on businesses.
It still amazes me that the people at the bottom, many of whom can't find work, still think the money at the top will trickle down to them. You'd think the last 30 years would've shown them that it doesn't happen.
You are reading to many American Socialist Party talking points.
But it did happen. It has happened every single time it's been tried.
The unemployment rate was 6.1% when the Bush tax cuts were enacted (May, 2003) and a year later it was 5.6% and a year after that it was 5.1% and a year after that it was 4.6%. Seems like it worked to me.
But then this according to the democrats running against Bush in 2004, was the worst economy in American history.
Let's here what President Kennedy thought about tax cuts.
Oh, and Kennedy's tax cuts worked too taking the unemployment rate from 7.1% in May, 1961 to 5.5% just a year later.
If taxes are good and taxes don't hurt the economy why not tax everyone at 75%?
Quote:
Whatever you do, you won't get taxed on it since it's not income.
Oh yes you will and if you don't think so you don't know much about depreciation schedules and US Tax Laws!
My company earns $2 million in profit and I decide to build a new 50,000 sq. ft. manufacturing building hiring 20 new workers using that $2 million. Do you really think I won't be taxed on that $2 million? Yes, I will be, it is NOT a write off so instead of having $2 million to build I'll have to make do with $1 million and not build so big and hire so many.
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It's not like they use a tax cut on other things like say donating to their favorite political candidate, the one who then pushes for even more tax cuts on businesses.
