Cutting taxes on the rich

[Zippyjuan]

If the goal is jobs, we need to look at what will encourage an employer to add more people. First, let's give a tax cut to wealthy people. What will they likely do with it? They probably have pretty much all the stuff they need so will probably save or invest it. That means more money available to be lent out. If you are a business, will you hire more people becasue there is more money available to borrow? Unless you already want or need to borrow, that will not enter your calculation to decide to hire or not hire more people.

What is more important? Demand for what you are producing. If you are having no problems making as many goods as you can currently sell, you won't be adding more workers. Unless you think you can sell more goods than you currently do. More money going into saving and investments is not going to change the demand for your goods and services (unless you are selling financial services).

Now lets give the same dollar worth of tax cuts to lower income people. They have more pent up demand and are more likely to go out and spend most of that money instead of saving it. This DOES increase the demand for goods and services. As companies see demand for what they produce rising, they will eventually hire more people (after first trying to get more out of current workers). This is creating more jobs.

Thus, if the goal is using tax cuts to increase jobs, give the money to those at lower incomes will be more effective than giving the same dollar value of tax cuts to the wealthy. In the case of the Bush tax cuts, most of the benefits went to those at higher income levels so it was not very effective as an economic stimulus and ended up adding to the budget deficit (since they were not offset by comparable reductions in spending which instead was increased to fight two wars).

[Acala]

can't disagree with that like i stated above on my 1st post , the thing is everyone knows we will always be taxed , we must make the best of it and everyone has to share the burden equally , there should not be a set of rules for different levels of incomes and business , like i said anyone that thinks exxon/shell/wallymart/mcdonalds pays taxes are not looking at the real world, there are times thru their special write offs they don't even give our tax money to the feds , they keep it as profit.

Job number one is to reduce government to its proper, extremely limited, role. Then, and only then, we can look to see if any tax beyond a small, uniform tariff is needed and, if so, talk about how to apply it. Trying to adjust taxes for fairness when 99% of government revenue is being misspent is just a means of distracting and factionalizing the public. Your argument is motivated by envy.

I am no fan of the government-created corporate business form, but that is not within the scope of this thread.

[Acala]

If the goal is jobs, we need to look at what will encourage an employer to add more people. First, let's give a tax cut to wealthy people. What will they likely do with it? They probably have pretty much all the stuff they need so will probably save or invest it. That means more money available to be lent out. If you are a business, will you hire more people becasue there is more money available to borrow? Unless you already want or need to borrow, that will not enter your calculation to decide to hire or not hire more people.

What is more important? Demand for what you are producing. If you are having no problems making as many goods as you can currently sell, you won't be adding more workers. Unless you think you can sell more goods than you currently do. More money going into saving and investments is not going to change the demand for your goods and services (unless you are selling financial services).

Now lets give the same dollar worth of tax cuts to lower income people. They have more pent up demand and are more likely to go out and spend most of that money instead of saving it. This DOES increase the demand for goods and services. As companies see demand for what they produce rising, they will eventually hire more people (after first trying to get more out of current workers). This is creating more jobs.

Thus, if the goal is using tax cuts to increase jobs, give the money to those at lower incomes will be more effective than giving the same dollar value of tax cuts to the wealthy. In the case of the Bush tax cuts, most of the benefits went to those at higher income levels so it was not very effective as an economic stimulus and ended up adding to the budget deficit (since they were not offset by comparable reductions in spending which instead was increased to fight two wars).

A nice statement of the Keynesian theory that consumption drives economic growth. The alternative Austrian view is that accumulation of capital drives economic growth. Guess which theory has brought us to our current situation?

[Odin]

Certain tax cuts would do more than others.

[Odin]

If the goal is jobs, we need to look at what will encourage an employer to add more people.

But that's not the goal, the goal is production and innovation. The private sector has also been distorted by malinvestment, caused by government policies. More jobs in the service sector is not going to help the economy, we need more jobs in manufacturing and technology.

[ILUVRP]

" Your argument is motivated by envy. "

i am not envyious of anyone or business , i do get tired of someone pi$$ing on me and telling me its raining.

i agree with the zippy post.

as far as goverment spending , when is the last time you have heard a elected person in washington refuse his/her( or their staff ) raise or benny / goverment insurance.

zippyjuan is 100% correct.

[Zippyjuan]

A nice statement of the Keynesian theory that consumption drives economic growth. The alternative Austrian view is that accumulation of capital drives economic growth. Guess which theory has brought us to our current situation?

Pretend you are an employer. Which is more likely to get you to expand your business and hire more people? More money for others to invest or more people buying from you? These (employers) are the ones making the decisions to hire or not hire. What will motivate them more?

[CaptUSA]

If the goal is jobs, we need to look at what will encourage an employer to add more people. First, let's give a tax cut to wealthy people. What will they likely do with it? They probably have pretty much all the stuff they need so will probably save or invest it. That means more money available to be lent out. If you are a business, will you hire more people becasue there is more money available to borrow? Unless you already want or need to borrow, that will not enter your calculation to decide to hire or not hire more people.

What is more important? Demand for what you are producing. If you are having no problems making as many goods as you can currently sell, you won't be adding more workers. Unless you think you can sell more goods than you currently do. More money going into saving and investments is not going to change the demand for your goods and services (unless you are selling financial services).

Now lets give the same dollar worth of tax cuts to lower income people. They have more pent up demand and are more likely to go out and spend most of that money instead of saving it. This DOES increase the demand for goods and services. As companies see demand for what they produce rising, they will eventually hire more people (after first trying to get more out of current workers). This is creating more jobs.

Thus, if the goal is using tax cuts to increase jobs, give the money to those at lower incomes will be more effective than giving the same dollar value of tax cuts to the wealthy. In the case of the Bush tax cuts, most of the benefits went to those at higher income levels so it was not very effective as an economic stimulus and ended up adding to the budget deficit (since they were not offset by comparable reductions in spending which instead was increased to fight two wars).

Whoa, do you really believe this?!!!

So I guess if you don't have a job, and thus have no income, an income tax break is going to give you a job?! What?

The best way to get demand up is to have more people employed. There is NOT a lack of demand that's driving this recession, Keynes. Wants are unlimited. Pent up demand?! Lol! Companies are not afraid to hire because they're worried about selling off their pent up inventory first. They don't want to hire because they can't afford it. The price of labor (with all the new regulations and unknowns) is too high.

You can't direct capital and think it's going to go where you want. The market directs capital in the most efficient manner. All you need to do is to take off the reins. It doesn't matter which side of the bucket you put the water in.

[Acala]

" Your argument is motivated by envy. "

i am not envyious of anyone or business , i do get tired of someone pi$$ing on me and telling me its raining.

i agree with the zippy post.

as far as goverment spending , when is the last time you have heard a elected person in washington refuse his/her( or their staff ) raise or benny / goverment insurance.

zippyjuan is 100% correct.

Um . . .what? I don't understand what you are saying.

[Brian4Liberty]

The subject was cutting taxes on the rich. If we want to limit the discussion to the current environment and situation, and the proposals of cutting Capital Gains taxes to zero, and expanding the tax base at the same time (i.e. tax the poor), then it probably won't help the economy at all (or create jobs).