[stevewig]

Could somebody explain to me why this slogan is true and maybe some background or historical reference to support the slogan?

I realize that this is a good strong political statement/argument and is certainly at the heart of Tea Bag thinking and I guess that that is the driving force of the current Republican party.

But is it really true?

[mikemike]

Its true, but the losses aren't proportional to the tax increase.

Lets take for example the "corporate jet loophole." Eliminating it would make it more expensive to buy, fly, etc. a private jet.

If fewer jets are bought, Gulfstream needs fewer factory workers in Georgia.
The jets has a crew of american workers, it is maintained by American mechanics, it is stored in an american hanger at an american airport... The less attractive it is to have a private jet the fewer of these people are needed hence the job losses.

Its not proportional though because what will likely happen is that you close the loophole and the demand for those jets goes down, the tax revenue also goes down as people sell their jets, and they use their money on something else. That something else creates a similar number of jobs but it might be jobs that aren't in the US (a vacation home in Bermuda and first class tickets on a commercial jet).

[GeneV]

Its true, but the losses aren't proportional to the tax increase.

Lets take for example the "corporate jet loophole." Eliminating it would make it more expensive to buy, fly, etc. a private jet.

If fewer jets are bought, Gulfstream needs fewer factory workers in Georgia.
The jets has a crew of american workers, it is maintained by American mechanics, it is stored in an american hanger at an american airport... The less attractive it is to have a private jet the fewer of these people are needed hence the job losses.

Its not proportional though because what will likely happen is that you close the loophole and the demand for those jets goes down, the tax revenue also goes down as people sell their jets, and they use their money on something else. That something else creates a similar number of jobs but it might be jobs that aren't in the US (a vacation home in Bermuda and first class tickets on a commercial jet).

Or more likely, they keep the jets and pay the tax.

[Nesster]

I think I saw one or another of the Reps say that you can't tax the wealthy - they create jobs by investing their money in hedge funds and private capital - you know, the kind that invests in start-ups which then create the jobs.

Or, as Jan Brewer rhapsodizes
Creating Jobs | Jan Brewer

Quality job creation has been a top priority of mine as Governor. My economic development efforts have already resulted in the creation of over one billion dollars of new private capital investment to date. My basic philosophy is that government needs to get out-of-the-way of job creators -- our innovators. State government's role is to provide a stable and business-friendly education, tax and regulatory environment in which our employers can grow. The role of the Governor is to serve as the top economic development leader and promoter for the state

See, society is set up as a meritrocracy - our worth is measured by our wealth. Direct correlation. The best job creators and innovators are invariably our wealthiest people. Look at Bill Gates!


or the American Spectator:
The American Spectator : The Obama Tax Hike Machete

But Obama shows no such care or precision when it comes to making sure his tax policies do not "sacrifice the core investments" of the private sector. The carried interest tax is a direct attack on the structure of partnerships that are used by innovative businesses -- from small firms to venture capital and "angel investor" groups -- that take risks and make an outsized contribution to economic growth and job creation.

Proponents of the "carried interest" want you to believe that this will only hit big hedge funds. Not that there is anything wrong with hedge funds per se, even though George Soros runs one. As I have written, they are one of the best forces to hold public company CEOs accountable to all shareholders.

See: without the hedge funds there would be less incentive to hold CEO's accountable! For that they deserve a tax break...

As far as tax breaks for corporate jets - there's a third, market driven solution, one that is currently hampered by government's distorting the free market via these tax subsidies. That is, like anything else 'non core', a corporation would simply lease or rent the use of such jets for their prestige trips, and simply learn to fly first class on commercial airlines.

[causey]

Its true, but the losses aren't proportional to the tax increase.

Lets take for example the "corporate jet loophole." Eliminating it would make it more expensive to buy, fly, etc. a private jet.

If fewer jets are bought, Gulfstream needs fewer factory workers in Georgia.
The jets has a crew of american workers, it is maintained by American mechanics, it is stored in an american hanger at an american airport... The less attractive it is to have a private jet the fewer of these people are needed hence the job losses.

Its not proportional though because what will likely happen is that you close the loophole and the demand for those jets goes down, the tax revenue also goes down as people sell their jets, and they use their money on something else. That something else creates a similar number of jobs but it might be jobs that aren't in the US (a vacation home in Bermuda and first class tickets on a commercial jet).

This were true if the super-rich in question were cash-strapped small entrepreneurs. But the people in question can afford the jets, the taxes, a couple of islands, and an unknown number of accounts in Swiss banks.
You need to watch

You Tube

You Tube

With an open mind.

[Nesster]

More seriously, we've shown charts that seem to indicate that the times marginal tax rates have been steepest have also been times of stable economic growth in which all sectors of society have participated.

We can't say that a wealthy individual with, say, an extra $120K in his pocket will actually spend that $120K - which would support job creation - or invest it in something that directly creates jobs. Investing in stocks, bonds, hedge funds, country clubs, real estate - this stuff is a bit dubious.

On the other hand, taxing that $120K away and spending it on, say, education asssistance, or health benefits for the poor, or even a weapons program...

[mikemike]

Or more likely, they keep the jets and pay the tax.

The current owners probably wouldn't be persuaded to get rid of their jets. I was looking at it more from the standpoint of the job losses start at the factory and the industry around flying and maintaining them dwindles as the number of jets shrinks.

[Nesster]

The current owners probably wouldn't be persuaded to get rid of their jets. I was looking at it more from the standpoint of the job losses start at the factory and the industry around flying and maintaining them dwindles as the number of jets shrinks.

As a shareholder, I would applaud my company's decision not to spend frivolous money in this economy. But as a shareholder of the manufacturer of the jets, I would bemoan the job killing tax hikes about to hit my industry.

Who has the more effective - and expensive - lobbyists?

[shooz]

Not me.

[GeneV]

The current owners probably wouldn't be persuaded to get rid of their jets. I was looking at it more from the standpoint of the job losses start at the factory and the industry around flying and maintaining them dwindles as the number of jets shrinks.

These taxes are very marginal considerations right now for that sort of purchase. The big issue is demand.

[GeneV]

This were true if the super-rich in question were cash-strapped small entrepreneurs. But the people in question can afford the jets, the taxes, a couple of islands, and an unknown number of accounts in Swiss banks.
.

My point exactly. Large businesses which can afford jets are not strapped for cash.

[Nesster]

However, let's hypothise here... say, the corporate jet is a must have business necessity. Can't stay in business, or gain sales, without one or two. These things cost a lot to buy and operate. That money might otherwise go towards paying for maybe a dozen production workers. But with the tax break, the company can afford to hire, say, a half dozen of these. With me here? The tax break creates jobs that otherwise would not exist.

As far as the first item: are these jets a business necessity? Un-informed socialist outsiders who have never had to meet a payroll might argue they are not necessities, but rather frivolous perks to fat cats. But we free marketers understand that a corporation, on the whole, will not survive market competition without becoming supremely efficient. Their best, brightest, most innovative employees are - invariably, through meritrocracy - at the top, and their time is golden. Deploying these people wherever required makes the corporation the job and wealth creator it can be. Therefore, not perks to fat cats, but tools for the innovation leaders and job creators of America.

[stevewig]

Regarding historical precedent for tax increases take a look at Reagan's 1982 increases:

Memo To Republicans: Following Reagan?s 1982 Tax Increase, Economy Boomed, Unemployment Fell

Quotation:

".............. After all, in 1982, the Reagan administration implemented the first of several tax increases that it would endorse in order to reduce the deficit. (Reagan raised taxes in seven of the eight years that he was President.) Republican lawmakers and conservative economists screamed that the tax increase would slam the economy and hinder growth. But as former Reagan and George H.W. Bush economic official Bruce Bartlett noted, “It would be hard to find an economic forecast that was more wrong in every respect“:..........."

[GeneV]

As with many things, it is more complicated than just "tax increase=bad." Which taxes? How high are the rates? Is the economy capital-strapped or demand challenged? and on and on. This simplistic nonsense just gets us deadlocks and more bad news.

[Oso]

It is just a myth that giving huge tax breaks to corporations and the top 1% that control all the wealth in this country will create jobs. If it were true, there would have been lots of jobs created during the Bush years. Where are the jobs? All outsourced overseas.

Back in the day, when the top marginal rate was at 75%, (this rate applied only to income of over 3 million per year) and banks had regulations to prevent gambling, the corporatist had to reinvest their income or else see it taxed at that higher rate. This meant capital improvements in their businesses, often in higher wages for the employees, etc. Something other than giving it to the government.

Now that the corporatist don't pay taxes, and the regulations that used to prevent them from gambling away their money are gone (along with all the jobs and the demand those jobs bring to the economy) well, welcome to the brave new world...

Jobs are created by demand, and there just aren't enough rich folks to do the kind of stimulation needed for a healthy economy. For that, you need a strong and healthy middle class. Not an elite class of aristocrats.

The new thing is the "new normal" economic growth projections. This country used to average about 3% yearly economic growth, but since bush, we do about 2%. This is not enough growth to support the high school graduates entering the job market. But, the forecasters predict that the new normal of 2% can be sustained for many years to come, since worker productivity in this country is growing by about 2% each year. That means that they don't have to hire anyone, and the corporatist elite can still make their record profits, simply by making their existing slaves, I mean workers, work 2% more for the same or less pay each year.

Want to stimulate the economy for real? Raise the minimum wage, significantly.