posted on Nov, 12 2012 @ 09:20 AM
Originally posted by Jeremiah65
Let's talk about the current debate on philosophical approaches to economical prosperity.
I did not support either candidate because I think both of them are wrong.
Cutting taxes to the "job creators" has not stimulated job growth. What stimulates job growth is when people re-invest their money into their
businesses. They create jobs, those people buy things, more companies hire to keep up with demand...etc...etc...etc.
Tax cuts (which I personally love but I see the paradox here) generally end up in personal bank accounts, not in business expansion or investment.
People get tax credits when they actually invest in business so...the twist to all of this is if you place a tax on profit, the business
owner/investor is faced with a decision. Put their money into use/circulation, or it will be taxed. This is the other side of the coin that some
people do not realize. When people have to make the choice to use their money or lose it in taxes, they will generally "use it"...which in the long
run will eventually come back to them in increased production.
It is an odd circumstance. I fully understand you cannot tax the rich enough to solve the financial problems facing the country. I also understand
that they do hold the keys to turning things over, but in a different way. IF the tax breaks were "creating jobs" like we are often told, that
would be great...but that is not what is happening. Wall Street numbers have basically returned to the levels pre-recession...corporations and
investors are making just as much money as they ever did. There is, however, no incentive for them to "use" that money creating jobs
So, they are hoarding it rather than re-investing it. If they want tax breaks, invest your money in business expansion...what we have been trying is
not working for the average person.
It is a conundrum for sure.
I agree. Particularly the part about the tax system. It used to be geared toward discouraging hoarding of wealth.
Employers either used the excess profit to hire more workers or raise wages to have a greater share.
Rather than pay the excess to the government in taxes.
This in turn spurred growth.
Now the government could in theory take everybody off the unemployment rolls and give them a paying job.
Create another huge bureaucracy like the TSA. That alone took quite a bit off the 8%ers.
I can remember several relatives telling me that I should try to get a government job with security, high salary and
the best benefits around.
But, if that were the holy grail then we'd all be working for the government.
It's a conundrum alright. It's too entangled between the government and business to ever unwind it back to
a more balanced system the way it is but would wreck the economy if the government cut the jobs.
Which they will, sooner or later, as tax revenues continue to fall.