We're hearing from all the Republicans that we mustn't tax "job creators" -- aka, the incredibly wealthy -- because if we tax them, they can't create jobs. Is there any truth to this?
Given that taxes on the stunningly wealthy are at the lowest they've been in 90 years, is this helping them to create more jobs? Let's take a look at the Koch brothers, who are now rate #4 on the Forbes wealthiest people in America.
In 2007, before Bush came into office, the Koch brothers -- two guys who inherited a large fortune from their parents and who are major funders, some might say founders, of the Tea Party -- were worth a paltry $34 billion. Bush era tax cuts started them off on a nice growth, the recession has been their playground, and now they're worth $50 billion. About a 44% growth in 5 years. Not bad, especially considering their wealth increased markedly during the Obama years. How can that be with all the stifling regulation that democrats insist on?
So, how'd they do on creating jobs? With that sort of pocket change, surely they must be creating loads of jobs!
Maybe not... They've paired down their job force from 80,000 to 67,000 during the same period. A 17% decline.
So, does making the uber-wealthy even wealthier make jobs? Not in this example.
What about Exxon Mobile? They've done stunningly well. Surely they're job creators!
"Wa, wa, wa," plays the muted trumpet to the game show contestant.
Stolen from someone far smarter than I am.
The Republican philosophy in action
The Republican philosophy in action
Formerly known as Panamah
Re: The Republican philosophy in action
You mean someone actually believes this?Zute wrote:We're hearing from all the Republicans that we mustn't tax "job creators" -- aka, the incredibly wealthy -- because if we tax them, they can't create jobs. Is there any truth to this?
Income tax rates on wealthy individuals have absolutely no connection to "job creation". The mantra doesn't even make sense from a logical perspective.
The rest of your post doesn't make any sense either. All of those billionaires you're talking about got wealthier in the past few years because the markets have improved, not because of tax cuts or regulations. And they don't personally create the corporate jobs in ExxonMobil or other companies.
You're confusing so many totally unrelated issues, it's hard to keep track.
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Re: The Republican philosophy in action
That "trickle down economics" doesn't work? Not sure if that is what your referring to or notTudamorf wrote: You mean someone actually believes this?
I think that was the point of the OP. Reducing taxes =/= jobs, even though you have a political party who has bought into this fully. And they have sold it successfully to Americans through sheer brute force of money.Income tax rates on wealthy individuals have absolutely no connection to "job creation". The mantra doesn't even make sense from a logical perspective.
I would argue the opposite. Deregulation and tax cuts have definitely made them richer, but there are other factors (that probably have a greater impact on their "net profit") like technology and the exporting of American Jobs.The rest of your post doesn't make any sense either. All of those billionaires you're talking about got wealthier in the past few years because the markets have improved, not because of tax cuts or regulations.
Your other statement is just plainly false! Even when the markets where going down, their "net worth" went up. If you look at the graph again, you see that the Roch Brothers took a hit in 2008-2009 and actually had less "net worth" in 2007. But sense then its been a pretty linear line to 2011. And the stock market hasn't been that reliable sense late 2009/early 2010 thanks to many factors both locally and globally. So the theory of saying, the stock market's strength is why the rich are getting richer, can be proven false.
(Note: I'm trying to point out that the rich are getting richer by being financially diverse while getting "coddled" by the political right and center. There is more than one reason why they are succeeding while the rest of "us" are struggling.)
If the "Employer" doesn't create corporate jobs...who does?And they don't personally create the corporate jobs in ExxonMobil or other companies.
I wasn't confused by the OP. If you follow politics at all (which I know you do) then you know enough of the background to follow the OP. Now whether you agree with the conclusion or not is up to you.You're confusing so many totally unrelated issues, it's hard to keep track.
Re: The Republican philosophy in action
I know. But the evidence presented there didn't support the conclusion.AbyssalMage wrote:I think that was the point of the OP. Reducing taxes =/= jobs,Income tax rates on wealthy individuals have absolutely no connection to "job creation". The mantra doesn't even make sense from a logical perspective.
Because their net worth is tied to one specific private company, Koch Industries, not the average of all publicly traded companies. But they still got richer because the value of their stock increased, just like those other billionaires, not because of tax cuts or regulations.AbyssalMage wrote:Your other statement is just plainly false! Even when the markets where going down, their "net worth" went up.
ExxonMobil is a corporation, a separate entity. It is the one that makes the profit and hires or fires the employees. None of the officers, or board members, do that personally, and their personal income tax rate is irrelevant.AbyssalMage wrote:If the "Employer" doesn't create corporate jobs...who does?And they don't personally create the corporate jobs in ExxonMobil or other companies.
It would be more accurate to say, you're just as confused, even though you don't realize it.AbyssalMage wrote:I wasn't confused by the OP.You're confusing so many totally unrelated issues, it's hard to keep track.
Re: The Republican philosophy in action
Tudamorf, when 40 pct of the population collectively owns about 0.1 of privately held property then there is a problem,Tudamorf wrote:and their personal income tax rate is irrelevant.
same as when 10pct of the populations collectively owns more of the private property than the other 90pct combined.
And even more so when that pattern holds for every 10pct bracket of the top (i.e. the top 1pct owns more than the 9pct below them
and the top (0.1 pct owns more than the 0.9pct below them).
Also, the argument made by mostly republican politicians is that increasing the taxes on the multi millionaires must not be done because -they- are creating jobs. The graphs shown here make clear that they do not, and by your own arguments you agree that the argument might hold true for the companies. Except that the same graphs show that companies are making record profits and record laying offs of workers at the same time.
If all that money they are raking in does not lead to more jobs then it is better to increase taxes and have the government create those jobs.
Right now all that money is doing one of two things: Either it is parked in off shore tax shelters (waiting out the inevitable economic crash), or it is used to further drain dry the treasury (companies can receive loans pretty much for free and can use them to buy back treasury bonds that do pay a significant interest. It would be much more efficient if the government would cut out that intermediate step and use the money directly instead of borrowing it back from the banks after first giving it away for free).
Eri
Re: The Republican philosophy in action
That is my point: That argument makes no sense whatsoever, because the personal income tax rate of wealthy individuals has no connection whatsoever to job creation by corporations.erianaiel wrote:Also, the argument made by mostly republican politicians is that increasing the taxes on the multi millionaires must not be done because -they- are creating jobs.
However, the link posted above doesn't stop there, but begins a Marxist rant against corporations and rich people generally, tying together concepts that are completely unrelated like personal income tax, personal net worth, and corporate employment.
The reality is, all of those billionaires, who are wealthy by virtue of their sizable ownership of large companies, do not personally employ those people. They don't pay for those people out of their pocket, or deduct them as expenses on their personal tax return.
Changing the personal income tax rate of a corporate officer will have NO effect whatsoever on how many people that company hires. And, except for the small minority of billionaires who make their money from active trading, personal income tax rates won't affect their net worth, which is tied to the value of the company, not the amount of personal income taxes they pay.
So yes, I agree with the general conclusion that taxing wealthy individuals will not affect job creation, but not with the reasoning posted.
You seem to be suggesting that the more profit a company makes, the more people it should be hiring.erianaiel wrote:Except that the same graphs show that companies are making record profits and record laying offs of workers at the same time.
That is false.
People cost money. Companies hire people only if those people can make the company more profit. If I have 10 employees and make $1 million in profit in year 1, and then in year 2 I make $1.5 million profit due to favorable market conditions, I don't automatically hire 5 more people. I may hire more if I think they can make me more money, or I may hire less if I think the ones I have are unnecessary.
Now, that does not mean that profits and levels of hiring are totally unrelated, because usually when you're making more profit it's because there is more demand for your product or service, and to fill that demand you often require more people to perform the services or make the products. However, there is no perfect correlation, as you suggest.
The way our tax code works, you only pay taxes on investments when there is a sale or exchange of an asset.erianaiel wrote:If all that money they are raking in does not lead to more jobs then it is better to increase taxes and have the government create those jobs.
So increasing personal income taxes (including the capital gains rate) isn't going to automatically transfer those billionaires' fortunes into the public treasury, because for the most part they are just sitting on all of their holdings.
As for relying on the government to make unneeded jobs, by taking money from rich people who are actually doing something productive, what are you going to do when your tax base evaporates?
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Re: The Republican philosophy in action
I guess I missed something. The Koch brothers own, through stocks and acquisitions, a significant amount of the private capital in the US/Europe. I really wish I was better at searching on "Google" to link It breaks down everything they "own" along with other Billionaire's/Millionaire's. Their is a reason that the worlds wealth is controlled by less than 3% of the population. It's not because they own one stock or corporation.Tudamorf wrote: Because their net worth is tied to one specific private company, Koch Industries, not the average of all publicly traded companies. But they still got richer because the value of their stock increased, just like those other billionaires, not because of tax cuts or regulations.
Re: The Republican philosophy in action
The two brothers together own almost all of Koch Industries, one of the largest private companies in the world.AbyssalMage wrote:I guess I missed something. The Koch brothers own, through stocks and acquisitions, a significant amount of the private capital in the US/Europe.
Because those 3% are smarter than the other 97%, yet they give the 97% a job.AbyssalMage wrote:Their is a reason that the worlds wealth is controlled by less than 3% of the population.
Re: The Republican philosophy in action
Except that the graph at the beginning of this thread, and many many other studies show that they don't.Tudamorf wrote: Because those 3% are smarter than the other 97%, yet they give the 97% a job.
And even if they give a 'job', it's pay is slowly but surely decaying towards subsistence level.
The number of Americans living below the poverty line is at an all time record high. And that is only accelerated because of the current economic crisis (which also serves mostly to drain money out of the middle class and into the off-shore bank accounts of the ultra wealthy). Outside of the USA and Europe things are accelerating towards grinding poverty at an even greater speed.
The trickle down economy that we have been told about for several decades has only increased unemployment and poverty. Because while there may be some theoretical downward spending on money, everybody is indoctrinated to ignore the fact that there is a torrent of money flooding out of the pockets of the 95pct of the population into the bank account of the richest 5 (and then most of it goes to the richest 0.1pct).
The whole things makes a lot more sense if you put the metaphor on its head, with water flowing down to the rich and very little of it escaping the law of gravity and trickle up again.
Ultimately though, the root cause of the economic problems is that the system is completely messed up. In 2008 a relatively minor 'market' (i.e. annual volume of trade) of a specific kind of debt insurance exceeded the total volume of trade in good of the entire world. Most companies involved had their total annual turnover 'insured' at least 4 times, and in many cases significantly more than that. Neither the people who underwrote nor who bought these 'insurances' had any dealing with the companies involved. They were just gambling with somebody else's money, but had a vested interest in getting companies to default on their obligations (i.e. drive them into bankruptcy).
For the bigger financial markets the relationship between money and economy was equally tenuous but the numbers were an order of magnitude bigger.
Today, not even three years after the governments of both the USA and Europe have gotten close to bankrupting themselves to bail the banking system out of the mess it has gotten itself in, they are already hard at work to ignore all the lessons that should have been learned. With the collateralised loans pretty much regulated they simply invented new tricks that are even more risky that let them get around the restrictions placed on them to prevent another melt down from happening. They are gambling big again, not only against each other but also against governments. That swiss banker that lost over 2 billion dollars? He was working with one such 'financial product'. (very basically the bank is pretending to trade in a way that would be highly illegal for them to do for real. If they 'do better' than the financial products they are shadowing they (claim they) make money. Because they are not really trading they can use as much money as they want, far in excess of the solvability limitations. In other words this is another bubble and melddown waiting to happen. Especially because the profits real and projected are used to finance less esotheric operations of the bank. A small mistake blew over 2 billion dollars. A big mistake is going to sent a chain reaction of bankruptcies through the entire system).
Eri
Re: The Republican philosophy in action
Really? On the graph it says ExxonMobil employs 80,000 people, and that's just one company.erianaiel wrote:Except that the graph at the beginning of this thread, and many many other studies show that they don't.Tudamorf wrote: Because those 3% are smarter than the other 97%, yet they give the 97% a job.
How many poor people do you know who employ 80,000 people?