How does tax cut for rich lower unemployment?

[thesquanderer]

I've heard the argument... The "$250k+ crowd" includes lots of small businesses who, with lower taxes, would be able to afford to hire more people.

But if a business is making a lot of extra profit which they fear may be largely taken in taxes, they can *always* use that money to hire someone instead, and then it's not profit and they don't pay taxes on it. Quite to the contrary of what they say, what the tax cut for the wealthy does is assure that the wealthy can keep the extra profit even if they *don't* hire anyone, whereas otherwise, hiring someone would indeed be a way to "avoid" paying the extra tax. So the cut does exactly the opposite of what lawmakers suggest.

This is in addition to the other well known facts that prove the rationale false... that many of these tax reductions are too small to pay even one person's salary... and that businesses don't avoid hiring because they don't have enough capital, they avoid hiring because they don't have enough customers. Especially in today's economy, not too many businesses would say "I could sell a lot more of my product/service if only I could afford to hire more people." And, by the way, that instance is exactly what banks and venture capitalists were invented for.

If we want to give small businesses money to hire people or buy machinery, then let's give them breaks specifically for those things, instead of giving them money they can keep regardless of what they do with it. Oh wait, yeah, they already *have* breaks for those things. So tell me again why we have to give them this tax cut?

The whole thing makes no sense, and the fact that "respectable" people keep saying these things makes me feel like I'm living in an Alice in Wonderland world.

[Autumn]

1. Same way it's worked for the last 10

years. It didn't.

[trotsky]

6. Bingo.

That is all that needs to be said.

[Ozymanithrax]

2. HOw does a tax cut for the middle class and poor lower unemploment? n/t

[emulatorloo]

8. Middle Class and Poor Buy stuff. Somebody has to sell the stuff.

This has been a democratic "meme" ever since I can remember. Tax relief should go to those that need it and that spend it to stim economy.

[Ozymanithrax]

15. How do you get there with the makeup of the Senate?

Republicans don't give a fuck about the poor and middle class. Most of the 33% of Americans who vote Republican are middle class or poor, but they will vote that way no matter what Republicans do, because they follow a conservative ideology and works as a religion. Republicans know that they can kill the whole tax cut and blame the Democrats for it with their base. They also know if the economy does not improve, the Democrats will get the bulk of the blame.

So, is it better to let all the tax cuts expire even though it will hurt the poor and middle class. See my link for an affect on taxes.

(http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=433&topic_id=561422&mesg_id=561422)

I hear this argument that the rich will make out like bandits, which they do anyway. But if those tax cuts expire, the rich will not feel it. They did beautifully under Clinton as they did under bush. The poor and the middle class will notice that small loss of money.

The tax cuts won't make a difference with jobs, but they will have an affect on not causing any more misery for the poor. Is it worth thumbing our nose at the rich if we screw the poor and middle class?

Cutting that money, unless you funnel the money into job creation programs that don't exist and won't with the Republicans in congress will not create a job.

[bobbolink]

26. One example.... For every Federal dollar spent on Food Stamps, $1.74 comes back to the local economy

For every Federal dollar spent on Unemployment payments, $1.62 comes back to the local economy.

A Denver realtor wrote about a study which showed that MILLIONS come back to the city because of subsidized housing, and HUNDREDS of jobs are created.

[jmowreader]

29. There's a problem with that meme

There are a LOT of small business owners who aren't in the tax bracket we're fighting with the Republicans about.

[Occam Bandage]

14. Our recession is caused by chronically low demand.

The middle class and poor spend every cent they get. The rich do not.

[Ozymanithrax]

21. Now, with the makeup of the Senate, get to a point where ...

we get only the Tax cut for the middle class when Republicans will filibuster it. Either we screw the poor to thumb our nose at the rich, who won't feel it, or we pass them all.

[fascisthunter]

16. who do you think the consumer base is?

[Ozymanithrax]

22. Now see my post 15 and 16 and show me the votes...

that get just the tax cut for the middle class passed.

Yout point is dead on, but the votes are not there to get it through the Senate. It is all or nothing.

[NYCGirl]

3. Who said it did? There are other things in the bill that

will help lower unemployment.

[emulatorloo]

12. Obama says the top 2 tax cut part of the bill is useless

and won't work. DU seems to want to claim he is arguing for the top 2% stuff as being stimulative. He argues the other stuff in it is stimulative, but the top 2% a waste of money. Basically that Repubs held that other stuff hostage to get their precious tax cuts for rich.

Out of the total 860b cost of the package, 81.5 B goes to tax cuts for the top 2%.

[alcibiades_mystery]

20. Obama has said this plainly and clearly over and over again

Those pretending not to have heard him are either fools or liars.

[KT2000]

4. the RW lady on tv said

they would hire more housekeepers and landscapers. I kid you NOT!

[emulatorloo]

13. LOL n/t

[fascisthunter]

17. She's a giving, caring soul

:sarcasm:

[L0oniX]

28. Undocumented of course.

[Rosa Luxemburg]

5. Also the rich have the 'wherewithal' to hire accountants to tax-evade

[emulatorloo]

7. Most "real" small businesses fall under 250k

for what it is worth. Now Koch Brothers are "Small Businesses" under the legal definition (number of owners) but they aren't small businesses.

Doesn't answer your question, but people under 250K do tend to spend the money and small businesses at that level do try to grow with it.

Top 2%? No.

[bluestateguy]

9. I remember people telling me about Prop 13 in California in 1978

Landlords said that they reason they charged so much in rent was because of the high property taxes, and if property taxes were cut, they could lower rents.

Gann and Jarvis, the organizers of Prop 13 convinced renters that passing this referendum would lead to lower rents. Well, it passed, and instead of the lower rents they were promised, the landlords simply pocketed the tax savings.

[Occam Bandage]

10. The basic idea is that people can't "keep" money.

Money that rich people "keep" would be wasted, yes, but nobody but Scrooge McDuck has a swimming pool made of currency. It goes *somewhere.* If money is spent, then the seller has money they can spend or invest. If money is put into a bank, then the bank loans it out to people looking to invest in their homes or businesses. If money is put into the stock market, then it is used to buy stocks, which in turn gives businesses money that they can either invest in their business or invest in the market (which would give someone else money they can either invest in their business or in the market). It works well in theory.

That theory is oversimplified. The world isn't Macroecon 101.

[Quixote1818]

11. Myth: Tax Cuts Spur Economic Growth

http://www.huppi.com/kangaroo/L-taxgrowth.htm

[reformist2]

18. More maids and butlers, of course!*

*No disrespect to those people with those jobs, of course.

[alcibiades_mystery]

19. It doesn't, as President Obama gladly admits

His argument is simple, and repeated numerous times: tax cuts for the rich don't do shit but increase the federal deficit. Unfortunately, we either give tax cuts to the rich, or the Republicans in Congress will refuse to pass those tax cuts and credits that actually do a stimulative effect on the economy.

That is, and has been, Obama's argument in a nutshell. He's said it over and over again. It has never been this administration's rationale that tax cuts for the rich have a stimulative effect.

I'm not sure what's so hard about this.

[TheKentuckian]

24. All this is about the top 20%, the rest is pure token.

[alcibiades_mystery]

25. That might be, or maybe not

If the OP means to imply that the administration has argued that top bracket tax cuts are stimulative, however, then the OP is false. Obama and every official in his administration has been very clear on this: top bracket tax cuts are NOT stimulative.

[thesquanderer]

30. Correct

I'm not saying that Obama says these things... but lots of people say these things, and I'm just amazed that anyone gets away with it and that anyone believes it.

[moondust]

23. Boom times for yacht builders.

Know any?

[B Calm]

27. The only thing that creates jobs is DEMAND (customers)!!!!!!

[RegieRocker]

31. K & R

Spot on

[ladjf]

32. VooDoo. nt

[Fire1]

33. Must be. n/t

[social_critic]

34. When the rich get tax cuts they hire people to walk their poodles

Don't forget rich folk own lots of poodles, and they're lazy, so they like to hire people to walk the poodles when they can. This industry, poodle care, is very large. It also includes poodle groomers, as well as the people who work in the poodle care centers serving coffee and tea to the owners. An additional service line is the care and feeding of poodles when their owners go to Vail and St Moritz. The possibilities in the poodle industry are endless.

And then think about the people who get the money earned hy the poodle care workers. Each of them has a bit more money they can spend at Walmart. And this means more people hired to stock Chinese products, and to drive the trucks bringing the Chinese products to the individual Walmart store from the container port. And the guys working on the cranes lifting the containers too, now that I think of it. And they in turn need people to build their trailer housing.

And the guys building trailer housing for the people who help keep Walmart stocked for the poodle industry workers also create more jobs. And because they have kids, and they got a bit more money to spend on their kids, they make trips to Toys R Us to buy more chinese made toys, and this in turn creates another virtous cycle of economic well being because the Toys R Us workers can afford to buy their trailers, and so on.

When I think of it, this is going to be an economic boom of historic proportions - they'll call it the Poodle Boom, I bet. I think I'm going to go fix my trailer to see if I can sell it to one of those Walmart workers, so I can buy me a newer trailer before the prices go up.