I'm sick of hearing that taxcuts create jobs. It's total bullshit.

[Bozita]

Demand for products/services creates jobs.

A widget factory doesn't hire a new worker because of a tax break. Rather, hiring goes on when demand for widgets exceeds the plant's ability to produce them.

The local sewer cleaner will only hire new workers when the demand for sewer cleaning increases to the point where he can no longer serve all his clients in a timely manner. Taxcuts don't have a damned thing to do with it.

Yet, the Dems join right in and sing this taxcut shit straight from the GOP songbook.

I don't get it. What am I missing?

[RKP5637]

1. Recommend!!! n/t

[county worker]

2. If tax cuts created jobs why did we lose jobs after the Bush tax cuts?

Put the two side by side chronologically and you'll see that jobs were lost even though there were tax cuts during the Bush administration.

[Cosmocat]

42. It really is that simple ...

I say this in any discussion with right wingers, and they either flat out ignor it or spin off in another direction ...

Really, if the "liberal" media was not in full out republican teet sucking mode, this would be their basic observation every time this crape is spewed ...

BUT, the conventional wisdom, such as it is, among the chattering class is that the supply side scam is THE BASIC TRUTH about economics ... They work from the premise that this complete nonsense is in fact reality ...

[WCGreen]

3. Well, if there are tax cuts based on hiring, that is a good thing...

The theory is that people will spend the money they get back in tax cuts because they will have more money in their pay checks. That does help a little, but government spending, the other side of the coin, can be better targeted and get into the markets much quicker.

[littlewolf]

4. going out on a limb here

tax cuts lets people keep more of their money
which they then use to buy goods and services
which creates demand which creates jobs ...
that is the way I understand it ...

[billlll]

5. tax cuts for the rich is the meaning in the OP

You OTOH, are talking about TC's for the middle class.

WPA is the best way to goose up consumer demand....immediately hires the unemployed.

R Reich, two Nobelists at

www.njfac.org

[devilgrrl]

7. That has supposedly been happening the past 30 years - how has it worked out?

:popcorn:

[October]

9. Tax Cuts for wealthy does not work that way

They don't spend it the way the middle class would. They hoard -- maybe I should spell that differently? -- they whoard. ;)

[Donald Ian Rankin]

39. Actually it's the other way round - tax cuts for the poor do less economic good, sadly.

Your theory is very appealing, but it's not right.

[AnArmyVeteran]

46. I am a multi-millionaire. When I get a tax cut I buy 10 times the amount of toilet paper with it.

When I get an extra million dollars in tax cuts I buy 10 times as much toilet paper, milk, ramen noodles, and potatoes as I did before. I don't horde the money or fire US workers, close businesses in the United States or use overseas slaves. Really, I don't! I really don't!!!

[SmileyRose]

10. the wealthiest are hoarding money, not spending it

banks
large corporations
the top 5% of income earners


they are hoarding money instead of putting it out into the economy. Why? Because the tax laws favor hoarding money. Cutting the rates on the tax law already geared toward hoarding money is just going to mean more hoarding.

Jack the taxes up the wazoo for wealth that's sitting around. Give deductions and credits for money that's creating AMERICAN jobs and increasing AMERICAN salaries.

[Thav]

13. That is true, however what the rich don't do

is buy as many goods and services as the middle class.

If the upper 2% of america got $100 million in tax breaks, not much of that would go toward improving the economy. Sure they'll invest that in companies, but $100 million in tax breaks for the rich will not generate anywhere near $100m in economic activity.

Whereas if you gave 50% of america $100m in tax breaks, much more of that would generate economic activity, since the middle/lower class spend their money on goods/services. This directly affects demand for goods and services. Whereas investments from the rich passively affects the same.

[truedelphi]

15. Totally agree. And also,

Welcome to DU.

[Thav]

35. I've been here for a long time,

I just don't post very much.

[AnArmyVeteran]

48. The rich just park their money in zero-productive interest bearing accounts.

When their money is parked it does nothing to help the economy. But if that money went to the poorest it would immediately go back into the economy. Not only that, but a dollar a poor person spends at a local business will recycle through the economy over and over again. The money is used. The rich don't put money to any productive uses if it's sitting in an account. It does absolutely nothing for the economy. It's lazy money and it's owner is making money for doing absolutely nothing. Someone making minimum wage at a local burger joint is doing more for the economy than a hundred billionaires who sit on their money.

Like the OP wrote, I just don't understand why members of the democratic party or its leadership haven't been able to sell this message. It's as if they are terrified of even mentioning it lest they be labeled as class warfare advocates or tax and spend liberals. I guess in their defense the majority of people just aren't that smart or aware. Unless something can be reduced down to a ten second soundbite or a one phrase message most people won't understand it. But republican leadership are able to control and manipulate their flocks by keeping things simple by omitting pesky things like facts. And anything that requires more than one layer of thought is beyond the comprehension of a typical right winger. They are one-dimensional, black & white people living in a three-dimension, unlimited colored world.

As the world becomes more and more complex it makes me wonder how most people will be able to keep up with the changes or how we will be able to sustain our democracy. The forces of evil seem to have all the advantages.

[eridani]

17. Oh, bullshit. They are never enough to make any kind of difference in budget planning

Most people don'e even have a clue that Obama gave them tax cuts, because they were so piddling that they didn't make any difference in peoples' lives.

Anyone earning $40K a year who would make a decision to buy a new car or a house based on $400 more or less in his/her total annual budget shouldn't be allowed out in public without adult supervision.

[no limit]

31. Even if people don't know they got the money they still ended up spending it.

Creating higher demand.

So I would argue that tax cuts for the middle class does generate more demand. Does that demand offset the price of those tax cuts? Now that is the million dollar question.

[eridani]

33. Given the high level of indebtedness, most people didn't spend it

They just gave it to the banks and credit card companies they are indebted to. It is a very well known fact that tax cuts are the least useful form of stimulus.


Top stimulus bang for bucks.

[no limit]

37. Thats a good chart, but it doesnt show just tax cuts for the middle class

unless that falls under refundable tax rebate, but I doubt it. And although many people are in debt alot of them have decided to default on that debt.

[eridani]

52. The point is that you get little stimulus bang for the buck with tax cuts n/t

[Ruby the Liberal]

21. Tax cuts for the wealthy doesn't increase demand for goods and services

It increases investment and savings, for them.

[AndrewP]

36. Exactly

[spanone]

29. pipedream.

[melm00se]

6. demand does drive job creation

but that can't happen without the $$$ to hire and purchase extra raw materials and equipment to fulfill demand.

one thing your model doesn't account for is job creation prior to demand (anticipation of a spike in demand).

your model is a reactive model which can fall before a proactive model.

[tjwash]

8. That's why job creation / unemployment always lags in an economy.

nt

[CJCRANE]

12. That's what business loans are for.

I'm no expert but I would guess that very few businesses are maintained or expanded entirely using cash surpluses.

[depakid]

28. errr... that's a supply side argument

[fasttense]

11. Actually, tax increases on the wealthy and corporations creates jobs. n/t

[Schema Thing]

14. Yep - Hire Someone = 100% tax shelter

[applegrove]

16. Tax cuts for the rich will just result in investment overseas, as that is where all the growth

in stocks will be. Even if they invest in American multinational corporations the investment will be in the exploding middle class in China, India, Brazil, etc...

[Motown_Johnny]

18. we are afraid of the "tax and spend" label

and refuse to argue that the way out of the great depression was to tax and spend

From the 50s to the 80s the top tax rate was never below 70% and that was some of the best economic times this country has ever seen.

We invested in infrastructure and (unfortunately) our military by spending heavily with all that tax money while also paying down the debt that had accumulated from the depression and WWII.

Tax and spend is a good thing but you can't sell it to the voter.


So we run and hide.

[FormerOstrich]

19. I counter with...

great..then let's make the tax cuts contingent on job creation. Everyone should be happy if what you say is true.

That usually ends discussion....

[OlympicBrian]

20. Interesting, related article

America's Income Defense Industry

The debate over ending the Bush tax cuts for the rich sidesteps a serious problem. The issue is not just whether the wealthiest Americans should be taxed, but can they be taxed?

The ultra rich have extraordinary means to engage in tax avoidance and evasion that ordinary citizens do not. In the first decades after World War II, the richest Americans began paying large fees to armies of professionals whose sole task was to help them avoid taxes.

http://www.huffingtonpost.com/jeffrey-winters/americas-income-defense-i_b_772723.html

[rucky]

22. People who defend it actually use the term "employer class"

as if a CEO is in his office interviewing people for the mailroom position.

[jp11]

23. I'd say what is missing is this talk is about income tax

and individuals for the most part I doubt people bankroll their small businesses with their income instead of their business's profits. I'm sure at first that might happen and in a lean time you might not pay yourself a salary but a tax cut isn't going to cover that.

The wealthy individuals don't decide to create jobs because they pay x% less on their personal income this year or next how this even comes into the argument about job creation is beyond me.

Now if tax breaks were introduced or allowed for company expansion in America, yeah that might spur a company to hire more people but like you say only if the demand/need is there if it isn't there is no point in adding another person to payroll that isn't going to help grow your business.

[Evasporque]

24. Bush Tax cuts for rich created jobs in the Luxury Mega-Yacht industry....nt

[raccoon]

25. Great post! Rec'd. nt

[LiberalEsto]

26. Tax cuts just create wealthier greedheads

and less for the rest of us.

[Brewman_Jax]

27. Another BS chapter in the supply-side playbook

which had been long discredited before St. Ronald of Reagan made it one of his core issues. :banghead:

[depakid]

30. The best one though was that tax cuts INCREASE government revenue!

That one was a real laffer.

http://en.wikipedia.org/wiki/Laffer_curve

[ck4829]

32. This talking point is harder to kill than a zombie on PCP

How many years of tax shelters, tax cuts, and corporate welfare with no job creation will it take?

K&R.

[taught_me_patience]

34. Tax cuts help stimulate demand

because people have more disposable income to spend on services and goods. Basic macro-economics... nothing complicated about it.

[HughBeaumont]

38. Well, yeah, except that it's a cockamamie theory that DOES NOT WORK.

Tax cuts are not even CLOSE to being a viable substitute for living wage jobs. If people have any disposable income (which they don't have since middle/working/poor wages have been stagnant in real dollars since the 1970s), they're spending 100% of it paying bills on necessities.

Stop thinking like a teabirther on this. Stop being an apologist for the wealthy. Supply-side is bullshit.

[taught_me_patience]

43. Tax cuts absolutely do stimulate demand

However, it's debatable whether that demand actually translates into meaningful jobs. If business feels the stimulus from the tax cut is artificial and temporary, then they will not be compelled to hire.

BTW... supply-side bullshit usually refers to the notion that supply of credit will allow business to supply goods at a cheaper price. Supply-side economics is mostly utter bullshit.

[Xenotime]

40. higher taxes on those widgets helps too.

[Beer Snob-50]

41. well in a way it is correct

you give the right type of tax cuts, it creates demand for stuff which increases employment. Example- give tax cut to those who make under 90k a year. they take that additional money and buy stuff with it. increases demand and increases employment.

also, i think if you give employers breaks on depreciation, that would increase the incentive to buy new machinery which would mean probably hiring people to run said machinery.

[TonyMontana]

44. Oh good lord

Another Internet "expert". Where do you people come from? Your entire post is wrong.

A tax cut for the widget factory allows the owner to afford another worker to create more widgets, which increases the SUPPLY of widgets, which brings the price of widgets down, and increases the QUANTITY DEMANDED of widgets.

Sigh!

[HughBeaumont]

47. Riiiiiight. That, of course, explains the tsunami of hiring for the last decade . . .

. . . since 2000, when the Top Marginal Tax Rate got slashed to 35%. . .




. . . oh, wait . . .

:yoiks:

[COLGATE4]

49. More 'Reganomics' bullshit. What the tax cut does in fact permit

is the owner to go out and buy back some of his stock (which is exactly what has been happening now), not hiring another poor slob to make widgets. On the contrary, this is usually accompanied by more downsizing.

[cbdo2007]

45. Yes and no

Tax cuts to SMALL BUSINESS will create jobs, as I know of at least a few small businesses that pay close to 40% in taxes.

Tax cuts to individuals or to large businesses do not create jobs.

[B Calm]

50. Never have gotten a job from a rich man, it's always been the consumer

that provides the jobs.

[mstinamotorcity]

51. We know it,they know it,but

the people have been told forever about tax cuts. This has been the repug song for years. The math never added up. But if you ask their loyal constituents to do the math, they won't. And whats really sad, is that quite a few of them can do the math, but because they hate a certain population or ethnic culture, they would rather go through hell. Just the truth.

[Generic Brad]

53. I'm sick of hearing that all government spending is wasteful

Education spending is a waste? Spending to take care of the disabled is a waste? Social Security spending to support the elderly is a waste? Spending to maintain our infrastructure is a waste? Why don't they just come right out and call us worthless resource eaters? That's exactly what those smug SOB's are implying.