Do you believe taxcuts create jobs?

[kentuck]

At this moment, the Bush taxcuts are still in effect - as they have been for the last ten years. On top of the Bush taxcuts, President Obama gave a small taxcut to every worker in America when he first came to office. On top of that, he also cut FICA taxes for workers, hoping to spur the economy. What other taxes can be cut?

Obviously, taxcuts are not the solution. How much more proof do people need?

[slackmaster]

1. Tax STABILITY is a component of the predictable economic climate needed for job creation

The absolute rate or amount of taxation matters, but IMO not as much as a known playing field on which people can be confident that their financial plans won't be torpedoed by unexpected rises in taxes, interest, insurance, and other expenses.

[FreakinDJ]

11. Only thing "Stable" are the Tax Loopholes that Outsource American Jobs

Ain't "No Fucking Way" we are going to create shit for jobs as long as the Corp Tax Code clearly favors the multinational "arms length" tax avoidance strategies

[trueblue2007]

32. COMPANIES WHO OUTSOURCE TO OVERSEAS. .... I would make PENATY TAXplu

plus BIG taxes on top of that.

[FreakinDJ]

33. "Tax Holiday" rewards Corps that outsource jobs

and the most likely legislation that will be passed.

I would like to see at least 1 honest legislator address this issue of the Corporate Tax Code encouraging outsourcing

[RKP5637]

2. No, they do not create jobs. They create investment opportunities for those

getting major tax cuts. It's so damn infuriating to see just now stupid America can be, but what is even more irritating is the fact many believe these lies despite the validation that NO jobs are created by tax cuts. This is an insane ridiculous place.

[jpak]

3. Nope - and the economic data cleary bears that out

yup

[KansDem]

4. Taxcuts for the middle and working class

Putting money into the hands of consumers is what creates jobs. It creates demand for goods and services which leads to the hiring of more workers.

Let the Bush/Obama tax cuts for the rich expire, then enact a fair tax rate on corporations and Wall Street transactions. Get rid of needless subsidies ($3 billion for corporate jets?)

"Trickle Down" did not work... Reaganism did not work...

Why we continue to stumble down this road is beyond me.

[EOTE]

16. ^^^ This.

Of course tax cuts can create jobs, but they have to be directed at the right people. Those people are the lower and middle class. Provide tax credits if necessary. More money needs to be going into the hands of those with the highest marginal utility of the dollar. Any additional money provided to the already wealthy will do nothing to stimulate the economy. Giving money to those who actually need it and will spend it will do everything to stimulate the economy. This is very simple and proven economics. And as such, it will be thoroughly ignored.

[FreakinDJ]

18. More Workers in China

They have got to address the millions of jobs being exported if we are to have any hopes of recovery

[treestar]

59. The right is fanatic that it has never really been tried

They just see the tax cuts as not enough, there is still too much regulation and wealth redistribution.

[Enrique]

5. they must

both sides are saying they do.

[Aerows]

6. Of course they don't

History has shown that time and time again. People having money to spend creates jobs.

[EOTE]

23. Tax cuts to the right people will provide them with more money to spend.

Which would then create jobs. The key is giving the money to people with a high marginal utility of the dollar.

[Aerows]

40. The people getting the tax cuts though

are the people who are part of the problem, namely, corporations who aren't hiring.

[EOTE]

41. Well yeah. Obviously those tax cuts are harmful.

But saying that tax cuts in general can't help stimulate an economy is simply not true. It's just the way that politicians implement those tax cuts that's wrong. We need progressive tax cuts and tax increases on those above a certain income level. It's really simple economics, but common sense is not so common these days.

[wtmusic]

7. The U.S. government is the nation's largest employer

and tax revenues are 100% spoken for before they're collected. Private wealth expanded by taxcuts will just as likely sit in trust funds.

Bottom line: tax cuts not only don't create jobs, they're a job killer.

[mmonk]

8. Demand is what creates jobs, not the tax code.

So no, I do not believe any political absolutes.

[kentuck]

9. So how do we get more demand?

Pay workers more or give taxcuts to working people? The only problem with the latter is that if you give working people taxcuts, which they will spend and help the economy and create more jobs, then the taxcuts for the wealthy will have to be increased to pay for the programs that people want.

[mmonk]

15. I prefer the model that works. That would be expenditures that put

people to work and jump start demand (the model FDR used). Also, I would like to see us develop an industrial policy like Germany did to keep jobs in their country through the downturn and at all times. But it can't happen with the mindset and strategies of the current political parties. So it won't happen. We the people have to come up with alternative strategies to survive and create jobs ourselves at the ground level.

[kentuck]

19. I agree.

I heard the CEO of Walmart say the other day that more than half of Walmart's jobs will be in this country? He didn't say if it was 51% or what? But, I thought to myself, why should 51% of jobs be acceptable. Why not say that at least 80% of all jobs must be in America, not in China?

[mmonk]

24. Largely this from my largely ignored post from yesterday:

“There’s something civil servants have that the private sector doesn’t. And that is the duty of loyalty to the greater good-the duty of loyalty to the collective best interests of all rather than the interests of a few. Companies have duties of loyalty to their shareholders, not to the country.” –David M. Walker, comptroller general of the United States, February 2007

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1631281

[FreakinDJ]

17. Working Class Tax Cuts just means more stuff from China

Sorry - I had to say it

This whole Free Trade model needs to be turned up on its head to put Americans back to work

[chrisa]

25. Lesser taxes can actually increase demand,

But if you cut taxes too much, there's no money coming in, so then the demand decreases again. I think that's the point we're at.

The Bush tax cut dummies pulled us further away from the tax sweet-spot and helped destabilize the US's economic system.

[mmonk]

36. They can be a stimulus but largely ineffective one when there are major

problems. They only work when the economy is working and there is a small dip. But they have to be from the bottom and not from the top because the top doesn't reinvest in workforce and equipment when demand is low.

[IndyPragmatist]

10. They can when taxes are too high, but taxes aren't too high

The basic premise is correct...you need money to be able to pay new workers. If the government is taking the money that you would use to create new jobs, then yes, tax cuts would allow businesses to create jobs. However, there has to be a demand for the jobs in the first place. Businesses don't hire for the sake of hiring. They hire because they believe that employee will help the business make more money. Theoretically, if that employee made $1 of profit, you should hire them (that includes the costs and time of hiring and other expenses). But that isn't always the case. Many businesses would not make more money by hiring a new worker. So there would be no benefit of tax cuts for the business to the worker, only to the business owner because they would be pocketing the extra money from the tax cuts.


The problem is that the Republicans use this is if its a universal law. It is not. It is correct in some situations, such as a company with no extra revenue that would benefit from hiring a new worker. This company would create a job from tax cuts. But most companies, and especially large companies are already at the optimal level of workers. Large companies have the ability to take a short term loss for a long term profit (which is often the case when new employees are hired, they don't always make money immediately). But these companies also have many accountants and economists that are telling them how to make the most profit.


It's the same as the argument that decreasing taxes increases revenue. The only situation where that would work is if our taxes are so high that they are harming business or forcing companies to hold money offshore. Remember the example of Google. They have tens of billions of revenue offshore in countries with lower tax rates. If we lowered our corporate tax rates to something more competitive, Google would likely move that back to the US. So for Google, lowering their tax rate increased the revenue to the US government. But Google is the exception and not the rule. The Republicans like to take exceptions (like Google) and present them as the rule. Then you have millions of people who don't understand the economics of the situation and believe what they are being told. So now you have millions of people who think that lowering taxes increases revenue. It doesn't. In specific situations, it can, but most situations would not.

[kentuck]

12. With the profits many companies are making...?

What rate would be "too high"?

[KittyWampus]

13. If they were aimed at small business owners & start ups, yes.

[daa]

14. Here is Georgia we have cut taxes and favored

business over consumers for 10 years now and for 47 months the state unemployment rate exceeds the national rate.

[chrisa]

20. Yes, if they can be paid for, and we can afford to lose the tax money.

The Bush tax cuts were a disaster, and there were no plans to pay for them. Using tax cuts as a model to try and boost government revenue is contradictory and nonsensical. The Conservatives who say, "Cut taxes even more, it will get us out of this financial mess" don't make any sense because the Bush tax cuts created a bigger deficit. Taxes were cut too much.

If a restaurant charges less than the amount they spend to serve their food, they will get tons of customers, but how could they expect to make a profit?

[ecstatic]

21. No. Higher sales/higher demand for services/products creates jobs

Taxes don't play into it at all.

[DefenseLawyer]

22. Higher wages create jobs in the long run

but hurt profits in the short run, which is why capitalist economies collapse upon themselves with some cyclical regularity.

[stranger81]

26. No, nor do I believe in the Tooth Fairy, the Easter Bunny

Santa Claus, or a Democratic Party that's on my side.

[florida08]

27. No they do not

Like others have said. They are used to reward those who invest in America that creates wealth to the middle class. In turn we are able to purchase consumer products that grow the economy. Which returns profits to those companies.

Tax cuts in a down economy actually hurts both. Companies can't or won't expand or even start up if there is no demand. So they sit on it. Drives up the debt. Drives down wages. Drives down the gov't's ability to help or pay it's debt. Drives up inflation and weakens the dollar. Ben Bernanke is a bigger part of this problem.

We have so many problems with trade imbalance,wealth inequality and outsourcing, which no one is addressing, that we are not going to recover anytime soon I'm afraid.

Proof will come as more and more get scooped up in the downward spiral. And it's coming.

[cherokeeprogressive]

28. I really can not say.

I believe the "bush tax cuts happened in '01 and '03 though. The highest tax reciepts on record occurred between 2005-10. I don't know what to make of that.

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist01z3.xls

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

[CatholicEdHead]

29. They can if they are narrowly focused and short term

not the wide scale endless ones we have now.

[ProfessorGAC]

30. There's A Glaring Absense Of Evidence That They Do

Now, if there were TRULY confiscatory tax rates and a paucity of loopholes, so that rich folks and big business actually paid the confiscatory rate, it seems likely that cuts would create jobs to some measureable degree.

But, manipulating low marginal rates by small increments, all the while allowing massive exemptions and deductions which make the marginal rate almost meaningless is merely political theater.

There is no evidence in economic history that these trivial changes to rates have anything to do with job creation.
GAC

[YellowRubberDuckie]

31. No.

But you know what does? DEMAND. Give the middle class and lower money, and you know what? THEY SPEND IT, causing demand, and lower prices and jobs. It's not rocket science.

[alc]

34. tax policy can create jobs

First, you want to be able to predict the ROI before investing. Tax rates factor into the ROI calculation, but the rate used is the MAXIMUM it may be in 2,3,5 years (depending on the investment). So set a rate and promise to leave it alone. It doesn't have to be low, but it need to be guaranteed or I'm assuming worst case. I've started a few companies and work for a fortune 500 now. I have 4 friends who's companies employ over 600 in the US.

Second, even startups calculate ROI in various scenarios. Many scenarios involve offshoring and/or overseas corporations if there will be oversea sales (especially if it's a large company or a startup with a venture capitalist involved who can manage the overseas legal/paperwork.) In this case a lower rate will help create US jobs.

Third, "broad" tax cuts include lots of waste. Some tax cuts really do result in ROI that causes an investor or entrepreneur create jobs. But the taxes also give breaks to many others who ship jobs overseas. If you want to target job producers, add these fields to the tax form
1) Number of US employees 2 years ago
2) Number of US employees in the tax year
3) Average salary+benefits 2 years ago
4) Average salary+benefits in tax year
5) Lookup(1-4). Get tax rate 5% to 50%
Nobody who says tax cuts create jobs can argue - if you create jobs you get 5% tax rate.
Nobody who says tax cuts don't create jobs can argue - if jobs are not lost the tax rate is 50%.
(I know both sides will argue anyhow. But my point is that the tax should be tied to an activity, not a theory.)

[Urban Prairie]

35. Yeah, I believe that tax-cuts could create jobs, heh!!

If we had fair trade instead of free trade, and employers were obligated by law to maintain a certain percentage of US employees, based equitably upon their amount of profits that are derived from sales/subscriptions/leasing that are purely domestic. If a company's profits are 75% from US consumers, their workforce should be comprised of 75% US workers.

Free trade is a misnomer, b/c it only exists to varying degrees in nations who are of the "free world's" economy. But since this has been going on for decades, especially since the US resumed trade with China, there is no going back now. Too many nations hold billions in our debts, and have US over the proverbial economic barrel. We will never hear that from our leaders in DC, however, they will continue to try to appease and pull the wool over the eyes of the more ignorant amongst the US population with the delusion that we still can actually create jobs in this country that will remain here, even IF they are not nailed down by purely physical necessity., which are blatant out-and-out lies.

Until the US wages matches that of the average third-world peasant, who is often exposed to health and safety hazards on the job every day, as well as having no fringe benefits, no cost of living increases, no minimum wage, no health care coverage, no workman's compensation, no working hour protections, and no retirement programs and/or pension, tax-cuts will NOT create jobs or even begin to muffle that great sucking sound of continued outsourcing and off-shoring of additional US jobs, whether new or old.

[Fearless]

37. If tax cuts created jobs then we would all be employed now.

[dissidentboomer]

38. It SEEMS SO logical, doesn't it? However, there is no evidence - for decades - to show that tax cuts

for corporations or the wealthy create jobs. Demand driven by low unemployment and a thriving middle and working class create jobs.

[otohara]

39. For High End Products

like yachts, and private jets.

[roomfullofmirrors]

42. slave labor creates jobs. You want a job, get into the slavery business.

[indurancevile]

43. depends on the context. generally, no.

[proud patriot]

44. nope

I believe higher taxes increases jobs , because to save money in a write off they will HIRE instead sitting on Trillions in Cash!

[JoePhilly]

45. Depends, but that's not the only quesiton ....

1) Tax cuts for the rich do not create jobs. The reason is that no matter how rich I am, I can only consume so much in terms of basic items. Sure, I could spend 1 million dollars and buy a yacht, but that only creates a few jobs.

2) Tax cuts for the middle class do create jobs. 1 Million dollars spent purchasing items like food, clothing, cars, computers, etc increases demand across a greater segment of the economy.

The economy needs turn over. It needs money flowing in and out.

The other question you need to consider is what is the impact of raising taxes on the middle class family? They actually spend the money. And so, if you raise their taxes, their money goes only to the mortgage, food, electric. They don't buy anything. And the economy stalls. The middle class needs discretionary money.

[Tennessee Gal]

46. No. Tax cuts for business should be structured as tax incentives.

Tax incentives, meaning tax cuts per employee hired for a determined period of time. Perhaps there should also be tax incentives for bringing jobs sent to foreign countries back to the US.

[spin]

47. NO! If they did we would have plenty of jobs right now...

During the Eisenhower administration the highest tax rates were as high as 92%. Today they are 35%. (source: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213)

To top that off there are so many tax breaks given to the wealthy and the big corporations that GE didn't pay ANY taxes last year. And how does GE thank us?

GE moving X-ray business to China. What message is sent to U.S.?
July 27, 2011

FROM CNN's Jack Cafferty:

Here is more evidence of the suicide mission this country is on: General Electric announced it's moving its 115-year-old X-ray business from Waukesha, Wisconsin to Beijing, China.

The X-ray business is part of General Electric's GE Healthcare unit, and this move is just part of a broader plan by GE to invest $2 billion in China.

This will become the first GE business to be headquartered there. A handful of the unit's top executives will be transferred to China but otherwise, the company says, none of the 150 staffers in the Milwaukee-area facility will lose jobs or be transferred. However, GE plans to hire more than 65 engineers and a support staff at a new facility in China.

It's the kind of news that makes you want to reach for something sharp and jab it in your eye. General Electric's Chief Executive, Jeffrey Immelt, is one of President Obama's advisers on… ready? U.S. job creation!
http://caffertyfile.blogs.cnn.com/2011/07/27/ge-moving-x-ray-business-to-china-what-message-is-sent-to-u-s/

[spanone]

48. if they did, we'd be swimming in jobs

[onpatrol98]

61. They created jobs...

They created jobs overseas.

[taught_me_patience]

49. Tax cuts to consumers absolutely help stimulate demand

which helps stimulate jobs. Consumers have more disposable income to spend in the economy. Any fiscal stimulus, whether tax cuts or direct government spending is only temporary, though. The Bush tax cuts wore off a long time ago... and the Obama tax cuts are starting to wear off now.

[Blecht]

50. Absolutely!

As much as I believe in Santa Claus, the Tooth Fairy, and any one of the world's major religion's idea of God!

[Trey9007]

51. Yes! Tax cuts to job creators definetly creates jbos! The problem is...

Washington doesn't seem to know who the job creators are. People making less than $250K a year are the job creators. This group makes up the vast majority of the country, and just about always puts any extra cash they obtain back into the economy, which creates demand, which creates jobs.

We don't have a spending problem. We dont have a revenue problem. We have a demand problem.

IMO...

[Jack Rabbit]

52. Is that supposed to be a rhetorical question?

[Auntie Bush]

53. My feelings exactly! If tax cuts helped...we'd have jobs now.

I don't know why Dem pols don't say this repeatedly.

[sendero]

54. Of course not.

..and most of the Republicans spouting that bullshit know it's a lie also.

But, it has been repeated so often in so many venues that lots of the hoi polloi do believe it. And that is the sum of the GOP's power, to make average Americans believe bullshit.

If tax cuts created jobs we'd be swimming in them right now, taxes are their lowest since WWII.

[bemildred]

55. Tax cuts destroy jobs, tax increases create jobs.

That what has actually occurred, during the course of my lifetime, taxes declined, and availability and quality of jobs declined too.

[Unvanguard]

56. They can as stimulus. But so does spending, and more effectively. n/t

[Jim Lane]

58. That's the right answer.

To say that tax cuts have no stimulative effect is silly -- it's trying to counter right-wing dogmatism with an equally obstinate dogmatism of our own.

If you give a million dollars in unemployment insurance benefits to a thousand people, it will almost all be spent immediately, thus helping to create jobs. If you give a million dollars in tax cuts to a single rich person, much of it will be invested, some might go toward buying a BMW (creating jobs in Germany), but some will be spent in ways that create jobs here.

Economists have calculated the multiplier effect for each type of fiscal policy. The multiplier for tax cuts is well below that for other options, but it isn't zero.

[StarsInHerHair]

57. NO

[Octafish]

60. Yes.

For Swiss bankers.