Friar Bijou wrote:
I'm still waiting for...
I'm still waiting for actual hard irrefutable evidence that lower taxes always
mean more jobs are created, rather than just increased wealth for stockholders.
That depends on how you're using the term "always". Employment is a function of revenue. Should be obvious, but I state it just in case there might be some people reading this who haven't realized that you can't employ someone unless your business earns enough money to do so. Similarly, job creation is a function of profits
. Assuming that profits means money earned in excess of that which was spent earning it (which includes existing labor costs), then to create new jobs you must have some profit to do so.
Does this mean that every single time anyone's profits increase they'll hire more people? No. But as a trend across the economy, the greater the average profit rates of businesses the faster new jobs will be created. Everything else being the same, if you increase profits in hand by 10%, job creation will tend to go up 10%. You just have to understand the difference between employing people in existing jobs and actually creating new ones.
So, y'know, cite, please.
Really? you need a cite to accept that if you need $1M seed money to open a new factory, and your existing factories generate $250k/year profits, then the difference between a tax rate of zero and a tax rate of 20% is the difference between it taking you 4 years to open your next factory or 5 years (250*4=1000 vs 200*5=1000). So if that new factory represents 100 new jobs, then you're changed the average job creation rate for that business from 25 jobs a year to 20 jobs a year. Even the most mathematically challenged should also notice that the rate of decreased job creation is exactly proportional to the rate of tax increase.
This really requires no more than some basic math skills. Assuming that the owner is saving up to open a new factory anyway, this math works. We can assume cases where he's not, but then he's not regardless of tax rates. So among those businesses who would create jobs, they will create them faster if the tax burden on their businesses is lower. It's pretty much axiomatic if you stop and think about it.
Here's a thought: link tax breaks to businesses on a $:jobs created scale. You make x jobs, you get y tax break. If you don't create the jobs, you don't get the break. That seems perfectly reasonable, don't you think, g?
No, it's pretty stupid really. There's a pretty obvious problem with that and its effect on the middle class. Can you figure it out? I'll give you a hint: You've just created a financial incentive to hire more total workers while paying the same amount for labor. Basically encouraging sweat shop style labor and discouraging professional skilled (and higher paid) labor. Your example is a great case for why government attempts to meddle in the free market tend to have unforeseen consequences.