Would you agree that tax cuts don't necessarily create Jobs since the Wealthy can just spend the money they ge?

[oded]

Would you agree that tax cuts don't necessarily create Jobs since the Wealthy can just spend the money they get from tax cuts on consumption for themselves or their family or friends or they can save the money in the banks ?


By the end of the 80s, it had become clear that the rich were not investing their liberated tax dollars on "good" forms of investment, like jobs and productive tools and technology. Instead, the money went towards consumption, the good life, and economically meaningless investments like antiques and sport cars. The lack of investment in the national interest became so obvious that Democrats in congress actually proposed guidelines to encourage it. During the 1992 campaign, Bill Clinton proposed a massive infusion of public investment into the nation's aging infrastructure to compensate for the failure of the private sector to do so.

http://www.huppi.com/kangaroo/L-capgainsspur.htm

Thom Hartmann: But it seemed, just common sense. I remember back in the ‘80s, I owned a business, International Wholesale Travel in Atlanta, Georgia. That business has, since we sold it done over 200 billion dollars inbusiness. And there was a year when we were doing really, really well and I could either write a big check to myself or not. And I decided not to, because I didn’t want to pay the increased taxes. I put it back into the business. How can cutting taxes on rich people, on high income people, do anything other than encourage them to take the money out of their companies, out of their businesses, and buy fancy paintings or yachts or put it in Swiss bank accounts? How conceivably could that help the economy?

http://www.thomhartmann.com/blog/2010/1 ... jobsreally

The major problem with this economic theory is that it doesn't work as effectively as its proponents suggest. A few economists may still cling to the trickle down economics theory, but many more agree that, in fact, trickle down economics hurts the lower classes, and it hurts the government. By reducing the tax burden for the wealthiest individual, the government cheats itself out of a very profitable wedge of tax revenue, meaning that this revenue cannot be invested directly in the citizens of the nation. Without that revenue, the government may go into debt to pay for basic services, thereby creating a serious problem for future generations.

The issue with trickle down economics is that it relies on actions by individuals which will benefit a whole, and most individuals are not that altruistic. In fact, many wealthy individuals and corporations are understandably interested in protecting their wealth, and when their taxes are cut, they may choose not to reinvest that money, meaning that no funds “trickle down” to people in lower socioeconomic classes. The tax burden on the middle class may also increase as the government struggles to keep tax revenues high enough to fund itself.

Trickle down economics tends to be promoted by conservative politicians who would like to see less government. However, moderates and conservatives have suggested that theories like trickle down economics are ultimately a disservice to the government and the citizens. By collecting reasonable tax revenues, a government can provide the benefits which are supposedly offered by trickle down economics, as demonstrated under politicians like President Roosevelt, who invested heavily in American infrastructure with government funds in the 1930s to foster recovery from the Great Depression.

http://www.wisegeek.com/what-is-trickle ... nomics.htm

[jan46]

Would you agree that tax cuts don't necessarily create Jobs since the Wealthy can just spend the money they get from tax cuts on consumption for themselves or their family or friends or they can save the money in the banks ?


By the end of the 80s, it had become clear that the rich were not investing their liberated tax dollars on "good" forms of investment, like jobs and productive tools and technology. Instead, the money went towards consumption, the good life, and economically meaningless investments like antiques and sport cars. The lack of investment in the national interest became so obvious that Democrats in congress actually proposed guidelines to encourage it. During the 1992 campaign, Bill Clinton proposed a massive infusion of public investment into the nation's aging infrastructure to compensate for the failure of the private sector to do so.

http://www.huppi.com/kangaroo/L-capgainsspur.htm

Thom Hartmann: But it seemed, just common sense. I remember back in the ‘80s, I owned a business, International Wholesale Travel in Atlanta, Georgia. That business has, since we sold it done over 200 billion dollars inbusiness. And there was a year when we were doing really, really well and I could either write a big check to myself or not. And I decided not to, because I didn’t want to pay the increased taxes. I put it back into the business. How can cutting taxes on rich people, on high income people, do anything other than encourage them to take the money out of their companies, out of their businesses, and buy fancy paintings or yachts or put it in Swiss bank accounts? How conceivably could that help the economy?

http://www.thomhartmann.com/blog/2010/1 ... jobsreally

The major problem with this economic theory is that it doesn't work as effectively as its proponents suggest. A few economists may still cling to the trickle down economics theory, but many more agree that, in fact, trickle down economics hurts the lower classes, and it hurts the government. By reducing the tax burden for the wealthiest individual, the government cheats itself out of a very profitable wedge of tax revenue, meaning that this revenue cannot be invested directly in the citizens of the nation. Without that revenue, the government may go into debt to pay for basic services, thereby creating a serious problem for future generations.

The issue with trickle down economics is that it relies on actions by individuals which will benefit a whole, and most individuals are not that altruistic. In fact, many wealthy individuals and corporations are understandably interested in protecting their wealth, and when their taxes are cut, they may choose not to reinvest that money, meaning that no funds “trickle down” to people in lower socioeconomic classes. The tax burden on the middle class may also increase as the government struggles to keep tax revenues high enough to fund itself.

Trickle down economics tends to be promoted by conservative politicians who would like to see less government. However, moderates and conservatives have suggested that theories like trickle down economics are ultimately a disservice to the government and the citizens. By collecting reasonable tax revenues, a government can provide the benefits which are supposedly offered by trickle down economics, as demonstrated under politicians like President Roosevelt, who invested heavily in American infrastructure with government funds in the 1930s to foster recovery from the Great Depression.

http://www.wisegeek.com/what-is-trickle ... nomics.htm

I believe that Bush's tax cuts don't create jobs because Bush's tax cuts didn't create jobs

in fact, we lost three million jobs after Bush's tax cuts went into effect

[said99]

http://answers.yahoo.com/question/index;_ylt=AnI_kQ90evUj1Rb3gLPQ7ersy6IX;_ylv=3?qid=20111028065356AAbrVAl

And what is the point behind posting this rant multiple times?

[osryd]

Most of tax cuts given to wealthy are used to buy the bonds the government issued to pay for the tax cut. It does not increase the fund available for investment, and may actually decrease if it causes them to buy more stuff. The justification is that it gives them incentive to increase their income and that has worked remarkably well, their income has increased over 250% since 1980 in inflation adjusted dollars. However I have never understood why I should favor a policy designed to make rich people richer that runs up the debt.

[varik]

A couple major problems with your theories here..

1) The largest periods of job creation in US history have come immediately after major tax cuts.
2) Revenues INCREASED after these tax cuts, due to increased profits and more workers to tax.

Real world history shows pretty clearly that "trickle down" does indeed work.

[advent]

What is the purpose of EVERY stimulus to date?

"Create jobs and stimulate the economy".

You saw that with GWB and stimulus checks to everyone under like $80K annual income, TWICE I believe.

It worked like crazy for Reagan in the 80's, lasting through the 90's.

Obama himself enacted the cut in SS withholding, probably the biggest cut to date, and a cut that is even smarter since it increases wages, allowing greater taxation come April 15th.

The Vaunted Stimulus had 280 BILLION in cuts. What is different about that?

Nothing. The economy just sucks SO BAD since many factors have come home to roost : Union related pension Tsunami, Housing crash, education cost inflation, debt crash, credit rating, ultra-stupid president / congress 2006-2010.

Tax cuts work. Taking capital out of private hands to spend on federal waste takes fast intelligent decisions and turns it into slow overpriced dumb decisions.

[arvad]

Steve Jobs is dead. You can't recreate him.

(Improper capitalization makes zombies).

[teyo]

Of course they don't. We are suffering from Trickle Up economics as lowering taxes on the rich is a failed experiment of over 10 years duration. During that time, we have seen less jobs created and yet the gop is only working to continue that failed policy. They still promote the lie of 'tax the rich less and they will create jobs'. Really? I mean, rea-a-a-ally????

If that is true then, after more than 10 years of saying that, where are the jobs. We should be drowning in jobs, right? But we're not. The opposite, in fact. And yet, corporations are enjoying historic profits and just sitting on it.

As for super wealthy individuals, they make money just by the returns on the money they have. They don't create jobs with that money and they can easily afford to buy whatever they want. The rest of us consume or pay out most of our funds for housing, food, utilities etc.

What is the gop answer to raise revenue when faced with these facts? They are touting a flat tax that would make everything the 99% of us buy cost more. Yeah, that's brilliant--not.

[wardell]

I am not an economist or someone who has studied the numbers in depth but I hear what you are saying. Trickle down economics makes sense to me on paper. But it does seem that the wealthy getting wealthier hasn't translated into more jobs and prosperity for the middle class. But there could be some variables or other factors at work that I am not aware of

[claudius]

This is as far as I got into your rant: "the Wealthy can just spend the money they get from tax cuts...." That is the whole point, Einstein.