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Didn't read the article because I'm headed out the door right now, but answer me: how many people or businesses with incomes under $200,000 hire workers?
Didn't read the article because I'm headed out the door right now, but answer me: how many people or businesses with incomes under $200,000 hire workers?
Example of an irrelevant question if I ever heard one.
Example of an irrelevant question if I ever heard one.
Hi MaseMan--
It's completely relevant. Fact of the matter is, poor people don't hire other people. They don't create jobs, because they don't have the $ to spare on paying someone else.
Think about it on all levels. On a personal basis, a rich guy can afford to hire someone else to cut his grass, fix his deck, roof, cars, etc. That's jobs created because he has $ in his pocket. Money that he wouldn't have if government raised taxes on the 'rich'.
On a business basis, pretty much every business needs some startup capital. In addition to a bank loan, the bank often wants you to chip in with your own $ in a significant way - that way the bank isn't shouldering all the risk alone. Guess where that startup capital comes from? Post-tax income that's been saved up.
Fact of the matter is, the top 1% pay 37% of all Federal income taxes already, even after Bush's tax cuts "were solely for the rich". So the class-warfare rhetoric gets old quickly.
But if the tax breaks were supposed to help the economy, where is the growth? Where are the jobs?
Hi MaseMan--
Jobs aren't being created because banks aren't lending.
This is a theory I'm working on, but I believe banks aren't lending because long-term interest rates are too low - so low, in fact, that they're getting dangerously close to long-term inflation expectations. Because Ben Bernanke keeps printing money in an attempt to lower interest rates...
Here's the market's inflation expectations over the next ten years:
Currently it's about 2.8%. With interest rates at 3.5%, that leaves a spread of 0.7% profit margin for the banks. To be sure, they'll probably find a way to leverage it, repackage them as securities or float bonds on the 0.7%, but let's face it - 0.7% is small. I doubt it's even enough to cover the overhead and administrative costs of running a bank.
Consequently, the bank is going to make damned sure that the lender isn't going to default at all. And because of that, many otherwise well-qualified individuals and businesses can't get a loan.
Therefore, the banks are better-off dumping all their money into TIPS - treasury inflation-protected securities - and riding out the cycle of money-printing and ZIRP. And the average Joe be damned.
On a business basis, pretty much every business needs some startup capital. In addition to a bank loan, the bank often wants you to chip in with your own $ in a significant way - that way the bank isn't shouldering all the risk alone. Guess where that startup capital comes from? Post-tax income that's been saved up.
Quote:
Originally Posted by hensleya1
Jobs aren't being created because banks aren't lending.
Agree.... Small businesses hire over 50% of workers, yet lending to small business is recovering more slowly than in other segments and it can be difficult to obtain bank financing. Small business owners do often invest their own startup capital from post-tax incomes. Inability to secure bank financing combined with lower post-tax income results in less hiring from the segment that historically hires the most workers.
Didn't read the article because I'm headed out the door right now, but answer me: how many people or businesses with incomes under $200,000 hire workers?
Corporate Tax and Income Tax are two completely different animals...
Obama did make a proposal to lower the Corporate Tax Rate, while increasing the Income Tax Rate for the top bracket.
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