I just thought of an answer to people who say that lowering income tax produces

[Maraya1969]

more jobs because the wealthy have the money to pay more people.

First off most of the people getting the tax breaks are not in the position to hire people. They are executives at large corporations or stock brokers or people who are just rich, (because I can't thing of anymore job examples) that are not in a position to hire people.

Secondly and I think this is the most important part is most businesses are owned by corporations, not be individuals. Do the CEO's of Starbucks or the local pizza joint down the road pay their employees with their own money? NO. Even if they are not incorporated the salaries come from the business profits not the CEO's or owner's pockets! So this "tax breaks help the economy because they allow rich people to hire more employees" is bullshit.

Of course if business is good the owners of the corporation are going to pay themselves and their employees more but that is about the state of our economy not how much income tax the corporations pay their owners or employees. The salary that they pay themselves is what an income tax increase or decrease affects, not the corporation profits.

When people complain about income tax remember incomes are what people earn. Profits are what companies earn.

[mudplanet]

1. I can't wait to get me a job cleaning a rich person's toilet.

[AndyA]

3. You start there, work hard, do a good job, and before you know it

they'll allow you to scrub the floors as well!

Why, at some point you might even be able to afford indoor plumbing, too! Life up on the veranda is good, but you keep your distance now, y'hear?

[av8rdave]

2. All good points...another to add:

Businesses don't create jobs just because they have more money. They create jobs when the demand for their goods/services is up vs. their inventory.

If a business wants to create more demand, it will use money to invest in new products and market them before deciding to produce in large numbers.

IMO, if you want to stimulate the economy with tax incentives, give those breaks to the people that do the bulk of the spending on consumer goods/services!

[DontTreadOnMe]

4. The best reply

Just say one sentence.

The Middle Class of America is sick of being trickled on.

Nothing more needs to be explained.

[Ozymanithrax]

5. I agree with #4, but your theory is wrong.

What they will say is that when rich people get money they invest that money in other businesses, buy yachts, expensive diamond rings, and premium beer. Spending that money encourages those businesses to hire people.

It is bullshit because if you give the middle class, or the poor, more money, they will put that money back in the economy by spending it or saving it. That money flowing through the economy stimulates businesses to hire more people to meet demand of their customers.

If the government spends money by using goods and services, giving out tax refund checks, building big bohunka battleships it still gets back in the economy, encouraging businesses where it is spent to hire more workers to meet increased demand.

Their theory is wrong because money, no matter who spends it, works through the economy, stimulating the economy. A stimulated economy creates more jobs. Spreading 100 million dollars across 10 million people will actually lead to the money moving through the economy quicker that giving 100 million dollars to 10 people. Those 10 people will be more careful and spread that money to fewer places. Those 10 million people will each spend their 10 dollars the day they get it, and their spending will be across the entire economy rather than in a narrow focused areas.

[Raspberry]

6. For consideration . . .

If I get a tax break, maybe I will go out to eat a couple of times a week. Maybe enough other people will do so that my favorite restaurant will have to hire more kitchen/wait staff. Maybe I have kids, and will have to hire a teenager from down the street to look after them while I'm out for dinner. Maybe that teenager will spend her babysitting $$ on cheap crappy jewelry at the mall, and the store where she shops will have to hire people to sell it to her.

Maybe I will save enough tax $$ to buy a new car. If enough people do, the local dealer will have to hire more salespeople, the auto manufacturers may have to increase production, which could mean additional hires, or overtime for their workers, who will then have additional discretionary income to spend on evenings out, or other consumer goods, and the cycle continues.

Look, I know this board is no fan of tax breaks, but after Ronnie Reagan's tax cuts, tax revenue actually INCREASED.

Just sayin'.

[Maraya1969]

7. I'm pretty much talking about taxing the rich and who some people say it will increase

job numbers. I understand the concept of buying more if you have more money and how that stimulates the economy.

[meow2u3]

8. In practice, lowering rich people's income taxes gives them incentive to lay people off

Since wages can be taken off as tax deductions, the less money they pay in taxes, the less reason they have to hire people at decent wages/salaries.

The truth is that the higher the tax rate for the richest, the more people they hire because the bigger the tax base, the more revenue the government can raise and the employers can take off bigger deductions. So the conservative, supply-side theory that lower tax rates produce more government revenue is one big, fat lie.

[ItNerd4life]

9. Sorry, but I disagree. You are forgetting small businesses

Most people are employed by small business.

I do believe that small business owners should pay at a different tax rate then people who work in corporations.
Small business owners will invest the money and create growth and jobs.

[librechik]

10. the rich horde money nowadays

they aren't interested in helping society, or even their own businesses. They hang on to what they have as if it was about to be stripped away from them. Because they know, if there were any justice in the world, it certainly would be. And they are afraid of justice.

They shouldn't be. Haven't seen any of that around much in decades.

[Xithras]

11. All taxes are bad for the economy.

It's kind of dumb to argue otherwise, but that's not really the point. Taxes aren't in place to IMPROVE the economy, they're in place to take advantage of the economy and provide benefits to society that wouldn't otherwise exist.

It's virtually indisputable that eliminating all taxes would provide a huge boon to the economy. Job creation WOULD take off, business spending WOULD climb, consumer spending WOULD climb, and everyone would have more money in their pockets.

Any happiness about that improvement would be shortlived, however, when that shiny new car you bought with your taxfree money gets wrecked because the roads disintegrated, and your frantic calls to 911 for emergency assistance go unanswered because the operators were all laid off.

Taxes are about balancing social good vs. economic good.

[ChoppinBroccoli]

12. The Best Explanation I've Heard

During the 2004 campaign, I heard somebody explain the failure of trickle-down economics in a way that has really stuck with me. The failure in the theory is actually pretty obvious if you just give it even a little bit of thought. How do economies improve? Economies improve when people spend money. So how do you get people to spend more money? You provide them with more money to spend. This is where Republicans stop thinking. They think money to spend = good, therefore even more money to rich people = better. And there's the flaw. People have to have more money to spend, but the money has to go to the people who are MORE LIKELY TO SPEND IT.

What happens when you give a poor person some extra money? They go down to the local store and buy things like food and clothes and pay for necessities. But what happens when you give MORE money to people who don't need it? They don't go out and spend it on Main Street. They hide it and hoard it. That's why trickle-down economics doesn't work.

Think of it this way. If we used trickle-down economic theories to solve the problem of world hunger, the solution would be to give all the food to fat people. Sure, you could come up with some half-baked theory about how the fat people would eventually tire of their food and get rid of it, making it fair game for those who are starving, but those theories usually involve the hungry people eating out of the rich folks' garbage cans. And that, in a nutshell, is trickle-down economics. Giving needed items to people who don't need them, and hoping those folks eventually tire of them and discard enough to eventually make it down to the people who REALLY DO need them. Great theory.

And it works for EVERYTHING too! The Republican Health Care plan: only administer treatment and/or medicine to healthy people! The Republican education plan: only teach smart people! (Actually, that one would never work because Republicans would complain that no Republicans are getting educated--plus, Republicans don't want ANYONE getting educated, because the educated are the enemy of the Republican Party).