Originally posted by mikejohnson2006
How and why do tax cuts/lower taxes create Jobs I would like for only Republicans and Right Wingers to answer this question how do tax cuts give the
Job Creators a Incentive
to create Jobs ?
The issue isn't so much "create jobs" so much as it is to free up resources. Currently, over half the National budget goes into medicare/medicaid
and income subsidies (welfare). The other major chunk goes into limited military production.
Taxes on the wealthy simply don't work. They will evade the taxes by using foreign investment strategies or by exploiting the very loopholes
legislators put in place to avoid their own tax hikes.
Taxing businesses also doesn't really work. If you raise the taxes on running a restaurant - the restaurant is just going to increase its prices -
which is going to tax the customer. In the local economy - this is, really, a battle of semantics and not really worth differentiating (sales tax
versus corporate tax is of no real difference because either the company sets the price increase or the government taxes the transaction to a very
However, in separate economies/markets - there is a considerable difference. Instead of a restaurant - they are a cannery - they can foods and sell
them to distant stores under different laws and taxes. When you tax the cannery - it must raise its prices to stay in operation. This raises the
price that distant stores have to pay.
Let's say there are two canneries. One in your town, with a corporate tax rate of 8%, and a neighboring town with a corporate tax rate of 2%.
Presuming production costs are very similar/identical - which cannery is going to offer the best price? Normally, the company producing where there
is only a 2% corporate tax (unless they think their label is worth a higher price and profit margin).
The community with the 8% tax rate runs into financial trouble, and decides to up the rate to 12%. The cannery has to raise prices and gets squeezed
out of even more markets. Laborers get laid off, and the owners look at having to move or shut down because they -cannot- lower their prices to match
the price point of companies working from lower tax areas.
The community with the 2% tax rate sees its cannery alive and well (if not growing), and will see other businesses move into the area to take
advantage of the lower taxes. This, in turn, draws more workers and spurs more economic activity (other local businesses that will have taxable sales
- low, that they may be - but at an increased volume).
Now - governments do require revenue - which implies some kind of taxation (or free-will donation... but let's be real, here). The thing is,
however, that governments are in competition with each other for businesses and industries that provide revenue and lead to lower rates of
unemployment and wealthier citizens on the average.
Will lowering taxes create jobs? Not directly. What it does do, however, is free up resources and encourage more capital investment. It also
improves our competitiveness in the international market. Because, realistically, corporate taxes are being paid for by the Taiwanese, Australians,
etc who buy our products on the international market (and their businesses - which is where our main place is in the international segment - building
the machines used in other nations' factories).
Taxes, are really something that should be seen as a necessary evil. The argument should never be: "why should we lower taxes?" The argument
should always be: "why is it necessary for us to raise taxes?" Or: "Why should we not be lowering taxes?"