The worst part about watching CNBC to monitor my stocks these days -- even worse than seeing those stocks in free-fall -- is having to listen to many of the reporters and guests wailing about the dangers of President Obama's proposed tax hike on the wealthy and railing against this act of "class warfare." Hmmm... Could it be a coincidence that some of the loudest on-air complainers are themselves in the targeted income bracket of more than $250,000 a year? (I am too, in a good year.) Before these commentators quit their high-paying jobs to avoid the calamity of higher taxes, I'd like to remind them that they have a little time. The President doesn't intend to boost their taxes until after we get out of this recession. In the meantime, he's cutting almost everyone else's taxes.
But even the thought of future tax hikes -- to help pay for two wars and other more worthwhile government spending -- sends these unrepentant supply-siders into a frenzy. 'The rich own the small businesses that create the jobs,' Obama's critics say. 'The rich are the engine of growth,' the mantra goes. Well, excuse me, but on this planet what we've seen in the last couple of years is a lot of rich bankers and other unscrupulous speculators and con artists (they don't really deserve the dignified title of business people) destroy jobs on a gargantuan scale.
And back when the rich were creating jobs, those jobs weren't so wonderful. Just how many jobs created by the construction of condos, shopping malls and SUV production does this country really need at a time when our bridges and schools are falling apart, when millions don't have health insurance, when our energy system is based on 19th Century technology, and when we're starving our scientists and teachers?
The rich are no longer in a mood to create even lousy jobs. They are taking what's left of their riches and fleeing to the safety of treasury bills. They are still trying to figure out if their asset managers were funneling money to Bernie Madoff and other crooks.
When private demand and investment collapse, the government has to step in and boost its own investment in our future. Fortunately, the government intends to invest in things we really need like education, science, infrastructure, health care and renewable energy. Frankly, that's better than video games and hummers and all the other crap that Americans buy when "we get to keep our own money."
What supply-siders don't seem to understand is that government jobs are not a dead weight on economic growth. If we employ more teachers and firefighters and peanut-butter-factory inspectors, they will take their paychecks and go to the mall and buy the crap that private investment tends to favor. Vital services and crap can coexist.
Any decent country needs a balance between public and private investment. Yes, if the government runs everything, you get a dreary Soviet-style morass that makes almost everyone poor. But the starve-the-government-to-death (except for the war machine and corporate welfare queens) philosophy of the Bush era was leading us to a situation in which the rich were counting their dollars in gated communities, while the rest of society was going to hell -- even while enjoying the video games.
Thank goodness that the trickle-down economy collapsed from its own incompetence and corruption. Thank goodness the American people elected Barack Obama to rebuild a society we can be proud of.
So, don't despair, all you CNBC anchors. Yes, you'll be paying higher taxes in a couple of years. But that's because Obama is going to make you even richer than you are now.
It does very little to support the notion that taxing businesses (and the people who own them) doesn't cause them to create fewer jobs. Of course it does. Duh.
That isn't what the big argument is about.
Raising taxes always creates more costs for business, and will result in less wealth creation.
Spending other people's money is usually wasteful. Yes we can use more good teachers, but the pay scale isn't the reason we have crappy teachers. Adding more government jobs is just hugely wasteful outside of a few specific areas.
The big argument is really about what benefits do we want to provide to society, versus what cost do we want to burden society with.
Rob Peter to pay Paul, and you will always piss of Peter. But Paul never seems to mind.
There are plenty of Peters who are more decent than you give them credit for. I agree that a lot of government spending is wasteful -- just as wasteful as private spending. Obama should tell the Democrats in Congress that they have to compromise and take some of the most ridiculous earmarks out of the spending bill, or he will veto it. Obama can't let the Congress ignore his desire to change Washington.
One more thing: in an ideal tax system, there would be no taxes on businesses, only taxes on people. Corporate taxes are double taxation. We should also tax consumption rather than income. But it will be hard to get from where we are now to an ideal system.
And government wastage is much worse than private waste. How can you even compare the two? When I have to justify spending for my company, it really needs to have a good reason. For the government, it is just whatever they can get away with.
I disagree on about your idea the ideal tax system. Yes of course, only individuals pay taxes, not businesses, but a business has rights (being incorporated), that an individual never has. In exchange for those rights, they need to pony up a bit to society.
Your suggestion about Obama vetoing the spending bill made me laugh. Obama has no track record of doing anything against the wishes of his party. He will likely never do such a thing. (It would be great if he did, and show some backbone. )
I heard Limbaugh one day defend the use of corporate jets by the auto CEO's, saying that Americans should be GLAD these guys were flying the luxury jets, because the people that make them have jobs. Yeah, what, all 11 of them?
Hardly a huge industry, more of a specialty market, no?
Up to 6 million jobs and 4 million small businesses can be created by A Human Investment Tax Credit Program.
This was missing from the stimulus package.
One component, a jobs tax credit, became law for one year and generated more jobs in less time than any legislation in our history.
Two versions of the 2009 Report can be downloaded free at: aesopinstitute.org
The full Report contains a post Keynesian economic analysis.
The short version includes only what can be done, as well as an outline for Congress. The House Ways and Means Committee needs to launch this urgently needed Program without delay.
They also confuse revenue and taxable income when it comes to Schedule C income. This was the problem with the controversy during the election and has not yet been corrected in most people's minds.
Finally, I think that people should realize that $250,000 is a lot of taxable income. I haven't done the math, but it certainly represents more that $300,000 of W-2 income for your average family of four.
The idea that spreading the wealth around means taking other people's wealth (to me) doesn't seem to be understood well enough.
For years the GOP has claimed to speak for small business but it has sold out to big money. All we want is a level playing field and we'll be happy. The fact that corporate pay is 411 times that of their workers illustrates the inequity that must be addressed.
Since when ddi the American dream stop at $250,000?
Really? With that sort of thinking, I doubt that you know any small business owners profitable enough to be in the $250,000 taxable income bracket.
I don't think it serves anyone to begrudge those people their wealth when they create new products, services and companies and make all our lives better.
The truth is that in the last eight years we have spent and NOT taxed. That is true fiscal irresponsibility. Now is the time to pay for those that can afford it but we should THANK people for their money and not act as if all people with wealth are somehow bad or don't deserve the money they have earned.
And now you want to tax when the country is finacialy in the toilet.
I never met anyone intelligent from Dallas (far southern oklahoma). You are no exception. I am willing to be that you are currently unemployed, living off the gov't teat and thinking that you are a republican.
Go, on Parrot
For many decades business has been so focused on the bottom line that human resources have been nothing more than something else to squeeze a penny out of. Did you know that most people who work at Wal-Mart make so little they are eligible for food stamps? Workers have been exploited so the rich will have the money to invest with Bernie Madoff.
I think it's about time the government started representing the interest of the social justice of this country.
The only way out of this economy, in my opinion, is to create a new exportable commodity, namely green energy and the components of that energy infrastructure.
Unfortunately, as we will see under the current administrations policies, investing in a "green energy" system will do nothing but lay the cost burden on the people that we are trying to give expendable income too. Without a pubic stake in energy production, we will foot the bill for the investment, then pay for the services, with no gains on our investments at all. We will provide the investment through taxes, pay the electricity bills (that will continue to rise for the unforeseeable future) and provide private profits even after the changes are made. There is no upside for the taxpayer.
If we owned the power industry, and directed profits to future investment and employee benefits, there would be no "skimming" of the profits by the private sector. We would receive the benefits of cheap electricity, and release income from living costs to expendable income.
I had a friend of mine that has his own plumbing company. He does ok but throughout our conversation he confided that he didn’t make any where near $250k a year. But he was still against capping CEO pay and higher taxes because this is America and if you remove the incentive of being able to hit it rich why would anyone try?
One other thing, when you tell them to step away from the Rush or the Fox it pi$$es them off.
so, low taxes are the incentive to make money? you are confused.
So we're supposed to let the banks implode, put the Big 3 out of business (along with 3 million workers), let people lose their homes, end Medicare and SS? That's what she would prefer. Wow! Now that would bring about civil war. I can picture those little ole grey haired ladies out there with their guns screaming they want the SS back!
If a bank was stupid enough to give out bad or risky loans then they should fail!
Why are we REWARDING FAILURE????