https://arstechnica.com/tech-policy...iming-tax-cut-would-create-thousands-of-jobs/
Couldn't have happened to a nicer company.
Couldn't have happened to a nicer company.
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Tax cuts create jobs! -500 of them
- Thread starter Loren Pechtel
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Harry Bosch
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Yea, I really hate Comcast! I can't wait until they start slowing down my favorite web sites....
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No matter how you cut it, cutting taxes to create jobs is a really iffy prospect....usually backfiring.
Now, you want to guarantee job creation, then tax the rich to create income tranfers to the unrich.
Because the unrich are probably living at the margin, they will spend it on 'necessities', stimulating the economy and creating jobs.
Not only that, those jobs will be created in portions of the economy where there is real need, which has heretofore been stymied by lack of disposable income.
What the idle rich are telling you about tax cuts creating job is absolute bullshit. They don't need to spend it, so they ship it in to offshore accounts where it does nothing.
Zero. Zip.
So, a thousand people being even more ludicrously rich than before is not creating jobs....it is nothing but fiscal masturbation.
Now, you want to guarantee job creation, then tax the rich to create income tranfers to the unrich.
Because the unrich are probably living at the margin, they will spend it on 'necessities', stimulating the economy and creating jobs.
Not only that, those jobs will be created in portions of the economy where there is real need, which has heretofore been stymied by lack of disposable income.
What the idle rich are telling you about tax cuts creating job is absolute bullshit. They don't need to spend it, so they ship it in to offshore accounts where it does nothing.
Zero. Zip.
So, a thousand people being even more ludicrously rich than before is not creating jobs....it is nothing but fiscal masturbation.
Ford
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Cutting taxes in the midst of a recession has been used before to middling effect. The Bush tax cuts for example.
But we're not in the midst of a recession. In fact we're in the longest period of post recession growth since the post-war recovery. The stock market is on fire. Unemployment is at historic lows. Interest rates are so low that the fed is considering raising them to put the brakes on the expansion of the economy.
We're almost at the point where we can't create that many more jobs. Tax cuts aren't going to do anything except put more money in the pockets of the well to do.
Hermit
Cantankerous grump
'Xactly.
If they don't stick their money in facilities that make more money without creating jobs, like hedge funds, futures, foreign exchange speculation and so on, they can buy big boys' toys. Something like this:
Used to be Larry Ellisons until he sold it to David Geffen. This US$ 300,000,000 investment has created 45 jobs. Well, as many as 45 whenever the boat is actually cruising somewhere.
If your tax savings don't quite stretch to buying that toy, you could make do with a Koenigsegg CCXR Trevita instead for only US$ 4,800,000.
Doesn't take many employees to keep it on the road, though.
barbos
Contributor
You forgot that thing had to be manufactured, that's about 300 $50k/year for 20 years jobs.'Xactly.
If they don't stick their money in facilities that make more money without creating jobs, like hedge funds, futures, foreign exchange speculation and so on, they can buy big boys' toys. Something like this:
Used to be Larry Ellisons until he sold it to David Geffen. This US$ 300,000,000 investment has created 45 jobs. Well, as many as 45 whenever the boat is actually cruising somewhere.
Same here, 3-4 guys had jobs for 20 years thanks to that car.
Underseer
Contributor
Hey, remember when Republicans pointed at the bonus AT&T employees got as evidence that the tax cuts were working?
First, that was misleading because those bonuses were negotiated over the course of a year, long before anyone knew about those tax cuts. I'm pretty sure it was a union that negotiated those bonuses, making the "this was caused by tax cuts" claim extra ludicrous. But now on top of the original lie, AT&T is laying off a whole bunch of people. So even if we ignore the dishonesty of the original argument, the argument has been debunked.
PS[ent]mdash[/ent]it's good to see a die-hard libertarian admit that tax cuts don't necessarily create jobs. Did your change of heart happen because of what happened in Kansas?
Underseer
Contributor
You want to create jobs?
One good way would be to raise the minimum wage.
These days, a new EMT is probably going to make less than what would have been considered minimum wage half a century ago (once we adjust for inflation of course). Heck, the average EMT is going to make about one and a half times what would have been considered minimum wage in 1965. That EMT had to go through specialized training, and yet is only making one and a half times what a burger flipper would have made half a century ago.
I bring this up to point out that suppressing the minimum wage affects a lot of incomes, not just the incomes of those actually making minimum wage.
There are a variety of other economic policies favored by most Democratic politicians and all Republican politicians that have the effect of suppressing wages. Keeping the minimum wage low is just one of them. Attacks on unions also have an affect on the incomes of non-union jobs, to name another example.
What a lot of Republican voters don't seem to understand is that these policies have an impact on the total disposable income of the entire population. Every year, the cost of living goes up, but wages are suppressed, and so year by year, the total disposable income of the population goes down. So what do you think happens to most businesses when the total disposable income of the population creeps down year after year?
The place where this gets particularly stupid is with restaurant owners. In local politics, restaurant owners are usually the ones fighting tooth and nail to prevent increases in minimum wage. All they see is the increase in their own costs, but can't see the effect minimum wage has on the entire population.
If one individual restaurant arbitrarily decides to pay employees more, then the only thing that changes is what they pay employees, and they lose profits. But if everyone has to pay employees more, then the total population has more disposable income. Restaurants are exactly the kind of business strongly affected by changes in disposable income. When families have to tighten their belts, one of the first things they do is eat out less often. When disposable income goes up, people eat out more, and the restaurants' increase in labor costs are offset by increases in sales.
But most restaurant owners can't think in terms of macro-economics. They can't see past the end of their noses, and so they fight like hell against increases in minimum wage, thereby guaranteeing that more and more of them will go out of business as the cost of living increases.
And yes, rich people do spend money, which does create jobs.
But here's the thing: some percentage of the extra money they get won't go towards increasing jobs. Some of it will get invested overseas. Some of it will be spent buying things from other countries. Heck, some might just get stuffed in a pillow case. They don't spend all of that money in the local economy because they don't have to.
On the other hand, if you put that in the hands of the working poor and lower middle class, then 100% of that money gets spent because they have to spend that money, and the money those working people spend all ends up in the pockets of rich people in the end anyway. The notion that we can stimulate the economy more by making rich people slightly more wealthy is simply asinine. Making the elites more wealthy only helps the elites. The economic changes since Reagan should be proof enough of that. In the decades since Reagan, the total taxes paid by rich people and large corporations has gone steadily down. Over that same period of time, things got progressively worse for the poor and middle class, when according to Republican economic theory, the opposite should have happened. As taxes on the elites got lower and lower, the number of good paying jobs in the economy should have increased since the 1980s.
One good way would be to raise the minimum wage.
These days, a new EMT is probably going to make less than what would have been considered minimum wage half a century ago (once we adjust for inflation of course). Heck, the average EMT is going to make about one and a half times what would have been considered minimum wage in 1965. That EMT had to go through specialized training, and yet is only making one and a half times what a burger flipper would have made half a century ago.
I bring this up to point out that suppressing the minimum wage affects a lot of incomes, not just the incomes of those actually making minimum wage.
There are a variety of other economic policies favored by most Democratic politicians and all Republican politicians that have the effect of suppressing wages. Keeping the minimum wage low is just one of them. Attacks on unions also have an affect on the incomes of non-union jobs, to name another example.
What a lot of Republican voters don't seem to understand is that these policies have an impact on the total disposable income of the entire population. Every year, the cost of living goes up, but wages are suppressed, and so year by year, the total disposable income of the population goes down. So what do you think happens to most businesses when the total disposable income of the population creeps down year after year?
The place where this gets particularly stupid is with restaurant owners. In local politics, restaurant owners are usually the ones fighting tooth and nail to prevent increases in minimum wage. All they see is the increase in their own costs, but can't see the effect minimum wage has on the entire population.
If one individual restaurant arbitrarily decides to pay employees more, then the only thing that changes is what they pay employees, and they lose profits. But if everyone has to pay employees more, then the total population has more disposable income. Restaurants are exactly the kind of business strongly affected by changes in disposable income. When families have to tighten their belts, one of the first things they do is eat out less often. When disposable income goes up, people eat out more, and the restaurants' increase in labor costs are offset by increases in sales.
But most restaurant owners can't think in terms of macro-economics. They can't see past the end of their noses, and so they fight like hell against increases in minimum wage, thereby guaranteeing that more and more of them will go out of business as the cost of living increases.
And yes, rich people do spend money, which does create jobs.
But here's the thing: some percentage of the extra money they get won't go towards increasing jobs. Some of it will get invested overseas. Some of it will be spent buying things from other countries. Heck, some might just get stuffed in a pillow case. They don't spend all of that money in the local economy because they don't have to.
On the other hand, if you put that in the hands of the working poor and lower middle class, then 100% of that money gets spent because they have to spend that money, and the money those working people spend all ends up in the pockets of rich people in the end anyway. The notion that we can stimulate the economy more by making rich people slightly more wealthy is simply asinine. Making the elites more wealthy only helps the elites. The economic changes since Reagan should be proof enough of that. In the decades since Reagan, the total taxes paid by rich people and large corporations has gone steadily down. Over that same period of time, things got progressively worse for the poor and middle class, when according to Republican economic theory, the opposite should have happened. As taxes on the elites got lower and lower, the number of good paying jobs in the economy should have increased since the 1980s.
Hermit
Cantankerous grump
I did not forget. It's a tarp for idiots to fall into by making wild, unsupported assertions. You managed, and without even cushioning your drop by mentioning the multiplier effect.
To start with, explain to me how it took 300 workers 20 years to build that yacht.
barbos
Contributor
Well, Intel just created a bunch of jobs in IT and for themselves. All computers have to be replaced as soon as possible.
barbos
Contributor
Well, it was not literally 300 of course, it was 3000 and 2 years.
You need to count job*years. "Job" is not a meaningful measure without mentioning how much money that job produce for workers.
In this particular case we have $300mil most of which were paid to workers of some kind.
Hermit
Cantankerous grump
It does not take 3000 workers 2 years to build a yacht, not even counting the work that takes place off-site, such as the production of the radar equipment and such. What's more, the building of the boat is a one-off affair. It was constructed in 2004, and when Geffen bought it off Ellison in 2010 it did not have to be built again.
An extra 300 million bucks of tax savings among members of the low income bracket, on the other hand, as whollygoats already mentioned in this post, and Underseer in that one, will result in increased consumption of goods and services that require additional employment. Even the much maligned fast-food franchisors will have to open new branches and the franchisees will have to employ more staff and/or roster existing staff with increased hours.
People who advocate the trickle-down theory are either filthy rich or suckers who piss into the wind.
barbos
Contributor
It's not one-off affair. There are companies which are 100 years old.
$300mil paid for it went to salaries for workers one way or another. You can argue that yacht is a useless waste of money and I will not disagree but a lot of people have jobs because of it.
No change of heart.
Tax cuts increase investment, thus the economy and thus in the long run jobs. There's no fast feedback, though. The GOP claims about what happens are extreme exaggerations.
What are you smoking??
Increasing the minimum wage cuts jobs, it doesn't increase them!
It increases wages, at least until you reach the point where job loss exceeds the wage increases.
Ford
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Yeah, every time the minimum wage is increased, the economy goes into a tail spin, millions are thrown off payrolls, and it only recovers when we reduce the minimum wage back down to what it was.
We could probably turn this current malaise of 4% unemployment into something really great if we'd lower the minimum wage back down to what it was in the 80s. Add in a 100 percent tax cut for billionaires and the jobs will flow like pee from a Russian hooker!
Hermit
Cantankerous grump
Not wrong. The good people of Kansas have been waitin. And waiting. And waiting...
Tax cuts creating jobs is not the same thing as tax cuts creating so many jobs as to pay for the tax cuts.
bilby
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Tax cuts don't necessarily increase investment. If there's no demand for investment, tax cuts just increase profits, and/or get money put into speculative bubbles, rather than real economic activity. Bitcoin mining (or for that matter gold mining) doesn't employ many people, and it doesn't create anything useful. Speculating in gold (or bitcoins) employs nobody, and creates nothing.
But if they did, then you would still be wrong, because investment doesn't increase jobs. Investment in sectors that currently employ a lot of people usually have the effect of decreasing jobs. If a company that digs ditches invests in a backhoe, they can lay off a hundred men with spades, replace them with one backhoe driver, and still triple the amount of digging they can do in a given time.
What increases jobs is government spending. If you find that too much of that is causing inflation, then you can keep the spending and reduce the inflation by highly progressive taxation.
Money 'naturally' flows from the poor to the wealthy. The task of a responsible government is to provide a return path, so that the difference doesn't become dangerous. Lowering taxes reduces the effectiveness of this, and is therefore a bad thing in the current economic climate, where the quality of life for the poor is declining. The purpose of an economy should be to make the lives of the people within it better, in the long run. Not of some of the people - but of them all. Right now, the wealthiest people in the economy are getting huge increases in wealth, that they don't really need to make life better (the benefit of having a car vs not having a car is FAR greater than the benefit of having two, three, or even a dozen cars, over having one car). At the same time, the poor are getting less well off. That's simply wrong, and we have the right, and the duty, to demand that this trend be stopped and reversed.
Too little redistribution of wealth from rich to poor is harmful. Too much redistribution is also harmful. Right now, you would have to be completely crazy to claim that we are on the 'Too much' horn of that dilemma. We need more wealth moved from the top to the bottom of society. Tax cuts are the exactly wrong thing to do in the current climate.
Oh, and in a highly automated society, 'jobs' are not necessarily a desirable goal. Perhaps it is better to make unemployment a comfortable lifestyle. I know that goes against your religion, but there is no actual reason to assume that people wouldn't work if they didn't have to - 'Work or don't get any nice luxuries' is more than enough incentive for most people; We don't need 'Work or die'.
Some people are simply not capable of contributing much to a modern, highly automated, society. We tolerate lots of freeloaders already (although we tend to call them 'children', 'pensioners' or 'veterans'); A few more wouldn't break anything. It would just lead to wages that more accurately reflected how unpleasant a job was to do, because it would give people genuine choice in the job market, rather than 'work or die', which is no choice at all.
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I concur 100% with bilby's post.
Jubilee!
Jubilee!