Glenn linked a post last week which really got at the economic problem of the president’s class-warfare rhetoric and his insistence on taxing the “rich”. Jim Tynen quotes an observer as finding the president “unaware of the link between job creation and the level of taxation on businesses and business owners.” That former liberal responds:
Look, the rich already have their money. And, duh, they’re good with it. And money is darned handy. Especially when elections season rolls around. They’ll protect the money they have, and they’ll enjoy it.
What we want them to do, however, is invest it so the economy grows again.
Demonizing the “rich” is not a means to create jobs. Doesn’t the president listen to his own rhetoric? He has said, “Small businesses produce most of the new jobs in this country.” And he wants to tax these folks. If he taxes them more, then they will have less to spend on innovation and expansion and will so create fewer jobs.
I’m one of those people paying approx 55% of my income to federal,state and local governments. I’ve always instructed my accountant to keep it straight and just pay what I owe. However, if they start coming after me for more than 55% I’m going to instruct my accountant to look at tax avoidance methods. (Tax avoidance is legal, tax evasion is not.)
The U.S. entered the Great Depression by steps over a period of years. And bad policy caused it; it was avoidable.
At first, it was just a stock market setback (the “crash” concept has been exaggerated with hindsight; per the following diagram, the setback was actually a bit *less* than we just had in 2008-2009: http://en.wikipedia.org/wiki/File:1929_wall_street_crash_graph.svg) in conjunction with an ordinary post-boom recession. The Fed had fueled an exaggerated boom in the 1920s. No such boom lasts forever; eventually it is time to pay the piper, liquidating the period’s crazy over-investments. That is “what a recession is”. If Washington stays out of it, then after a come-to-Jesus period where bad businesses fail and bad loans are charged off, growth resumes. It happened that way in Harding’s recovery from the Depression of 1920, Reagan’s recovery from the 1980s recession, and in many other times and countries.
But Washington didn’t stay out of it. No, Washington got to work! Hoover expanded spending, raised taxes, expanded spending some more, raised taxes some more. His Obama-like policies gave the economy shock after shock, never letting it recover. Then Roosevelt took over and did it even more. The rest is history: even by the start of WW2 (in 1941), the economy still hadn’t recovered.
Now we have Obama doing it. He’s made it more expensive to have employees. Naturally, employers have fewer of them. That’s called “cause and effect”. Now Obama wants to raise taxes on the nation’s job creators. It might be OK if he combined token tax increases with serious spending cuts, lightening government’s overall burden on the economy. But no, he wants serious tax increases combined with token spending cuts, because he is a Big Government, Big Brother Is Watching Over You kinda guy. The result is predictable: a continued growth-free, zombie economy – at best. Quite possibly something worse.
Obama is not going to budge given Reid’s pathetic response & Obama’s earlier statement; he’s determined to have more taxes & more spending. Obama & the Democrats don’t get it.
I suspect that most of the super-rich pay very little in taxes. They have enough money to shelter income and avoid taxes in order to pay well below the 55% mentioned by Richard in #1.
At the risk of sounding like some sort of lefty, I have a bone to pick with the term “job creation”. The business of business is to make money, not create jobs.
Outside of government, no one in management sits around figuring out how to hire more people; they try to figure out how to sustain and increase profits. If it takes more people then jobs get created. If profits can be increased by doing the hokey-pokey then they put their left foot in, put their left foot out…
Business has alway been free to create jobs. In the pursuit of profits and in the interest in increasing the gap between executive and worker salaries we’ve been exporting jobs at an alarming rate for a long time. Job creation is occurring – just not here.
Pursuit of profit is good (given the quality of life it’s provided over the years) provided we don’t forget the greater good (that’s mushy, I know). But there is such a thing as “too much of a good thing” – such as when the pursuit or profit comes at the expense of societal stability and the future of the country.
I think the thing that keeps me from heading left is that, as a conservative, I don’t believe the government can fix the problem (it’s contributed in numerous ways to where we are).
Damned if I know what to do.
Obama insisted during his 2008 walkabout that the economy grows from the bottom up.
Apparently, people go out and start working and pretty soon their pockets have money in them.
Therefore, perhaps everybody just needs to grab a shovel and go dig some dirt and then at the end of the day, take the money that appears in their pockets and spend it.
You could even plant some ethanol seeds in some of the holes people dig and go back later and when the ethanol plants have grown and fill your gas tank.
Rich people don’t use shovels. They should be taxed. The end.
Not to mention his demands that employers keep salaries the same or raise them. Hello Pelosi’s Minimum Wage increase and 24% teen unemployment.
Re 4. “Except in government, noone sits around figuring out how to hire more people”. I have lived through a number of depresions and recessions and I know people that got hired because they had a family and out of work. But you are right. Money is what gets most people their job. You are also right in saying that the super rich gets by by not paying their taxes. For instance, I have read that Soros has his money down in the Bahamas to avoid our taxes.
John
Dramacrats don’t care about optimal economic outcomes, they care about vulgar displays of power. There is no more vulgar display of power than simply taking something away from someone else under color of law.
BTW: The Demonrat State of Illinois just hiked taxes 66% to deal with its budget deficit. How well did that work out? Not very, they still have a massive deficit.
V the K,
“9.BTW: The Demonrat State of Illinois just hiked taxes 66% to deal with its budget deficit.”
Yes, as we’ve seen time after time after time, new taxes only lead to more new spending.
If I recall correctly, his business is physically in NYC but is based in Curaçao (Dutch) off of Venezuela.
For the love of God, can someone please link to some verifiable, non-partisan information that shows that lower taxes on the rich has directly created more investment and jobs in the US?
11: You read that? where? who was the source? is it verifiable? I read (saw and heard as well) that haliburton had a paper subsidiary in Bermuda so it could work with our biggest enemy, Iran. They still doin’ that?
The job creation that supposedly follows tax relief on millionaires and billionaires has not materialized. I know it’s hard for Republicans to remember more than five minutes ago, but George Bush passed tax cuts for rich people, and all that happened was the housing bubble and financial collapse. No jobs. Rich people didn’t take their tax cut and open factories or hire more workers, they took it to their broker and tried to hit the real estate jackpot. Does anyone remember this? Or are we still pretending that Barney Frank single-handedly orchestrated the financial collapse around here?
How long are we supposed to wait, how much more do we have to give to the rich, before they grace us with the job creation? The wealthy have the lowest tax rates they’ve enjoyed in decades, the government covered the bill when the crash occurred, corporate earnings are higher than ever… what else has to happen? How much of a burden could these people possibly be experiencing given all of the above?
And Dan, you need to stop conflating ‘rich people’ with ‘small business owners.’ Small business owners having a hard time because it’s hard to get good loans and because consumers aren’t consuming – not because they’re being crushed by taxes. The problem is that we have billionaires in this country who end up paying less as a percentage of their income than do regular people in taxes. You can’t run a democratic society that way.
The job creation that supposedly follows tax relief on millionaires and billionaires has not materialized. I know it’s hard for Republicans to remember more than five minutes ago, but George Bush passed tax cuts for rich people, and all that happened was the housing bubble and financial collapse. No jobs. Rich people didn’t take their tax cut and open factories or hire more workers, they took it to their broker and tried to hit the real estate jackpot. Does anyone remember this? Or are we still pretending that Barney Frank single-handedly orchestrated the financial collapse around here?
How long are we supposed to wait, how much more do we have to give to the rich, before they grace us with the job creation? The wealthy have the lowest tax rates they’ve enjoyed in decades, the government covered the bill when the crash occurred, corporate earnings are higher than ever… what else has to happen? How much of a burden could these people possibly be experiencing given all of the above?
And Dan, you need to stop conflating ‘rich people’ with ‘small business owners.’ Small business owners having a hard time because it’s hard to get good loans and because consumers aren’t consuming – not because they’re being crushed by taxes. The problem is that we have billionaires in this country who end up paying less as a percentage of their income than do regular people in taxes. You can’t run a democratic society that way.
Kevin, check the economic record of the 1980s, starting in 1983 when Reagan’s across-the-board tax cut kicked in. If you’d like, I can provide the growth figures for the first 8 quarters following the implementation of said tax cuts.
Suggestion: Levi and Kevin should STFU about job creation until either one of them manages to create one.
Now, while the usual liberal bed-wetters whine about how the “wealthy” are sitting on their assets instead of doing their duty to Obama and hiring workers they don’t really need, for the sake of the greater glory of Obama, here’s what they ignore.
– The USA still has the second highest corporate tax rate in the industrialized world. Even Sweden … SWEDEN for Set’s sake — lowered its corporate tax rate to make itself more competitive. (25% in Sweden versus 35% in the USA {Obama wants it closer to 40-50%}).
– ObamaCare is creating thousands of pages of regulations telling employers what medical benefits they are required to provide to new employees. Many of these regulations are still being written. This makes it impossible for employers to know how much these additional mandates will cost per employee. Levi and Kevin are, of course, completely ignorant of rational economics, and have no interest in learning. But here is the science, It only makes sense to hire employees if they produce more in value to the company than it costs to employ them. Employers are not obligated to hire employees and lose money just to make Obama look good,
– The Obama EPA is still threatening massive new energy regulations. Here is another fact Levi and Kevin are ignorant of. To grow the economy, energy should be abundant and cheap, not scarce and expensive. The Obama regime’s drilling moratoriums and green energy mandates make energy scarcer and more expensive.
– The Frank-Dodd financial “reforms” make it harder… not easier… for companies and consumers to get credit.
Given all of these facts, where is the incentive for businesses to hire and grow?
also note how Levi doesn’t seem to note the recovery through the 2000’s even after 9-11.
(Oh wait, Levi believes President Bush is responcible for 9-11, never mind).
Also several economists show that it is the current uncertainty and high tax rates that are slowing the economy. Surely they’re clearly smarter than Levi, and he should shut up and let them drag him kicking and screaming into the future.
So hush Levi, adults are talking.
The Bush tax cuts were for the benefit of EVERYONE WHO PAYS TAXES not just the “rich”!!!
Richard,
Levi never let facts get in the way of one of his screeds.
Design the system so that it doesn’t, and it won’t. The right system is total separation of Business and State, under the Rule of Law. If the government can be counted on to enforce rights of life, liberty and property – including law against criminal gangs and against fraud, and tort law that operates against A trashing or polluting B’s property – and if government otherwise stays out of business, forcing businesses to compete with one another on merit and on the goodwill that they win with customers / the public – then things will work much better.
Where our so-called “capitalism” goes wrong, the hand of government was invariably there to make it go wrong. Because the hand of government was there, incentives were distorted, moral hazard was created and opportunities to “game the system” (screwing over the other players with government-based advantages) appeared. The list of examples is virtually endless. Bernard Madoff’s Ponzi scheme relied on an environment where people did not ask tough questions, because the SEC was supposed to take care of it for them. The housing bubble / financial crisis were largely creations of the Federal Reserve (forcing below-market interest rates), CRA (mandating that banks make sub-prime loans), and Freddie and Fannie (providing a market, or more accurately a “laundering operation”, for those sub-prime loans). The Gulf oil spill in 2010 happened after British Petroleum, an Obama donor, received certain favorable rulings from the Obama administration.
V, well said and I may have to steal it from you. Apologies / thanks in advance.
The job creation that supposedly follows tax relief on millionaires and billionaires has not materialized.
Wrong.
The job creation that supposedly follows a trillion borrowed dollars of “stimulus” hasn’t happened at all — and in fact, according to the Obama Party’s own economists, has been a colossal FAILURE, with each job “saved or created” costing an average of $278,000 per job.
That’s all you’re screaming about, Levi. Those are facts. You come in here with your bullshit rhetoric, nothing to back it up, and we slap you in the face with facts.
Liberals are magical thinkers who don’t believe in science, mathematics, or economics; instead, they follow a blind, zealot faith in the power of the God-King Obama. Your delusional adherence to failed and crashed theories about wealth redistribution is what makes you such an easy mark for charlatans like Obama, Levi. You’re a fool, and every statement you make just proves it.
Oh, and Levi, Counterfail, and all the other board lefties who were screaming about “detention” and “rights” and “war crimes” and calling for impeachment?
Choke on this.
Game over, Levi Liar Boy. Unless you and your Obama Party start calling for impeachment right now, you’re revealed to the whole planet as a bunch of lying, pathetic hypocrites who will say and do anything for political power.
One more thing:
That’s a pragmatic argument: it implies the profit motive maybe is kind of morally dirty, but I guess we have to accept it because it seems to produce good outcomes.
I disagree with the flavor of that, or the underlying premise. The profit motive is morally right. Profit is morally good in itself, because life is, and profit is the basis of life. When a one-celled organism scooches in the direction where those sugar molecules are coming from (in an effort to find more of them), it had better make a profit on that action or else it dies. If it does, it not only survives, it flourishes.
Now, of course you can point to somebody who does profit wrongly: someone who achieves personal profit by violating the rights of others. As suggested at #21, they should be in jail. The profit they gain is objectively far less than the harm they inflict. You can take any good thing (say, love) and find someone who makes an ugly crime of it (say, rape).
I think, ILC, the issue comes from the root-level confusion that is the false Biblical quote, “Money is the root of all evil”, with the actual quote, “Love of money is the root of all evil”.
The motivation to make a profit is inherently moral; after all, you are applying the gifts and talents you are given and your willingness to apply yourself in a fashion that creates value for someone else, and you are then rewarded for it. Profit is the difference between the value your labor has to you versus the value it has to someone else; in order for you to be successful, you have to provide people something you have that they want/value more than you do.
The problem is that people still are carrying around that bad quote, letting the fact that they have money make them feel guilty about having it. What the Judeo-Christian value system makes clear is that it is not HOW much money you have; it’s how you use it – encapsulated in the “From those to whom much is given, much is expected” thought.
Liberals, however, twist and pervert these noble sentiments. The Obama Party mantra of, “From each according to what he has, to each according to their needs” is, if you look at it, a complete inversion of the “much is expected”. Selfishness ruins the system in the Judeo-Christian aspect; selfishness makes liberalism run.
Levi is a fine example. Levi believes that anyone who has more than he does should be giving it to him. He isn’t grateful for what he has; he’s upset because he doesn’t have what he thinks he “needs”, and he thinks his “needs” then give him the right to lay claim to what others have. You share in the Judeo-Christian model because what you have is a gift; in contrast, the Levi/Obama Party/liberal model encourages you NOT to share and in fact to hide your wealth, because it will be taken from you.
Well said… thank you.
… and also, how you got it. (productivity vs. theft)