The Rich Are Not Going to Give Us Jobs
Thursday 09 September 2010
by: Froma Harrop, t r u t h o u t | Op-Ed
Let's cut the baloney about jobs and rich people's taxes. If corporate profits automatically turned into jobs for the little folk, the unemployment rate would be plummeting.
It happens that company earnings now exceed their lofty peaks of the housing boom. And big-business balance sheets are sloshing in cash. Corporate America's decision to stick with its current workforce is not for a lack of dough.
Companies don't create jobs because they have extra money jingling in their pockets. They take on new workers when they want to expand, and right now the demand's not there to warrant that growth. Corporations are in the business of maximizing profits for the benefit of their managers and shareholders. They're not in the business of creating jobs, nor should we expect them to be.
And so how should we respond to Republican claims that restoring Clinton-era income tax rates for the wealthiest 2 percent would destroy jobs? We shouldn't. They are irrelevant.
An employment policy based on further enriching the richest Americans -- who may or may not spend their wealth on job-creating ventures -- is like trying to feed chickens in the barnyard by dropping feed from an airplane. It's far more logical to focus tax cuts on activities that are likely to expand American business.
That's why President Obama's proposal to make the research and development tax credit permanent -- something many Republicans have advocated -- makes more sense. It would give companies an incentive to spend their money on their businesses.
But to politically sell this fixation on keeping rich people's taxes low, Republicans must convince wage-earners that their jobs depend on enlarging a few personal fortunes. Thus, Republican House Minority Leader John Boehner of Ohio characterizes the Obama plan to let George W. Bush's tax cuts for the top brackets expire as "job-killing tax hikes."
Republicans made similar hysterical warnings when Bill Clinton proposed raising taxes for the richest 1 percent early in his administration.
"This is really the Dr. Kevorkian plan for our economy," Rep. Christopher Cox, R-Calif., said in May 1993. "It will kill jobs, kill business and, yes, kill even the higher tax revenues that these suicidal tax increasers hope to gain."
It didn't quite turn out that way. America gained a net 21 million jobs during Clinton's two terms (against only 3 million during Bush's). Business investment was higher in the Clinton years. The economy grew more, as did tax revenues, and Clinton ended his presidency with a budget surplus. Even the rich got richer under Clinton, but most people didn't seem to mind because everyone else was doing better, too.
For years, the right has cultivated an air of servility in a fearful workforce. I want to know what magic potion Republicans use to make so many Americans assume that they are wards of the rich.
Employers generally don't take on workers as a charitable gesture. They may be splendid human beings, but they hire you in the belief that your sweat will contribute to the business's bottom line. The employer's need for your labor and your desire for a paycheck makes for a mutually beneficial relationship. But it is not a one-way street.
Americans generally don't like class warfare. Labeling any tax increase for upper incomes as such is a time-honored way to bully the public into silence. Actually, it's not too much to ask the top sliver -- whose wealth is running away from that of even ordinary millionaires -- to do more to contain our soaring deficits.
If the rich get richer from a recovering economy, and they will, then good for them. But they're now owed tax cuts besides.
Copyright 2010 The Providence Journal Co. Distributed by Creators.com
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Comments
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NO tax "cuts" of the Tux
Thu, 09/09/2010 - 09:54 — Vic Anderson (not verified)NO tax "cuts" of the Tux CATS; and NO catfood for the Rest of US!
Excellent piece, Froma. I'm
Thu, 09/09/2010 - 10:48 — MR (not verified)Excellent piece, Froma. I'm so glad someone has actually published what I've believed for years: tax cuts for wealthy does NOT equal employment increases. And yes, the right, led by Rush Limbaugh, has succeeded into duping American into believing it. Even when Rush said as much many years ago I asked aloud, "what's keeping them from pocketing the extra cash?" Of course, that point was never discussed. Convenient. How many more jobs has Rush created with all his wealth?
The middle class definitely needs a huge tax break; much more than the rich. IMO the wealthy should pay a bit more, but not obscenely so, than everyone else. Because when you become that rich and powerful, there is an implicit responsibility you should have to the society at-large that other income classes don't due to their lack of financial power to do so. The elite definitely needs to be held accountable. After all, we're now seeing the fallout of when they're not held accountable financially, and how far has that gotten us?
But, the middle class won't get any serious tax relief, because to do so would result in a more level playing field between the middle class and the elite, and we can't have that in America.
Here, Here! No more tax cuts
Thu, 09/09/2010 - 11:05 — Anonymous (not verified)Here, Here!
No more tax cuts for millionaires
Tax cuts for the middle
Thu, 09/09/2010 - 11:38 — alaskadiva (not verified)Tax cuts for the middle class? Has anyone noticed we had a big tax cut from Obama? What we haven't had are wage increases to keep up with the cost of living for the last 30 years! Of course, the wealthy CLASSES have never been so filled with RICHES as they are today. Class war? Where do I sign up?
While tax cuts may or may
Thu, 09/09/2010 - 13:59 — Erich von Freemason (not verified)While tax cuts may or may not create jobs, tax increases raise the cost of production. Since, generally, price is determined by supply and demand, the only way to get a higher price is to reduce production (and lay off worker). Is that really what we need right now? 1936 and 1937 saw huge increases in the tax on retained corporate earnings, and the result was the drop in GDP in 1937 and 1938.
"But they're now owed tax
Fri, 09/10/2010 - 01:16 — Anonymous (not verified)"But they're now owed tax cuts besides."
Shouldn't the word "now" in the last sentence (above) be "not?"
to Erich vF: what a load!
Fri, 09/10/2010 - 06:37 — Anonymous (not verified)to Erich vF: what a load! what tax on personal income of the wealthy increases production costs? Y'all have socialized all your costs onto us the working taxpayers, and you ain't paying your weight. This economy that we all work in provides you with superior returns. you could never have done it all by yourself. so quit acting like you are a superior form of life.
USians only hate class
Fri, 09/10/2010 - 17:00 — stormkite (not verified)USians only hate class warfare when the little guys get in a swing or two. They absofuckinlutely LOVE it when it's the guys at the top dropping thermonuclear bombs on the little guys.
Oh, and Herr von Freemason, the thing you leave out is that higher production is totally irrelevant when your customer base hasn't enough income to keep food on the table AND a roof over their heads in the same month because in the name of reducing costs you've cut all of their wages and many of their jobs...
It's amazing that the "business" leaders in the US have totally forgotten that in a free society, before there can be profits there must be a functioning economy, and that doesn't happen without actual investment.
Or perhaps they're simply hoping to get rid of that "free society" thing entirely and go back to the Feudal Era, before the Magna Carta, where they can rule by divine right and mailed fist?
O.k, think of this...if tax
Sat, 09/11/2010 - 20:51 — mysterioso (not verified)O.k, think of this...if tax cuts for the rich are, according to the republicans, supposed to create jobs - where are the jobs ? The cuts have been in effect for almost 10 years, where are the jobs ??
Von Freemason spewes his
Sat, 09/11/2010 - 20:54 — Anonymous (not verified)Von Freemason spewes his right wing diatribe here again.
Froma, you got it wrong.
Sun, 09/12/2010 - 12:34 — Ken (not verified)Froma, you got it wrong. The corporations do not hire based on having extra money. Right! But small businesses, sole proprieters, partnerships and other owner-managers hire for expansions only if they have the marginal extra amounts of funds or capital or savings. And we do know that the American economy depends on these small businesses to create the most jobs. So can business owners disqualify some earnings from taxes so that if the demand rises, they have the funds to hire more Americans? Father of two, Ken Libby
Great article! Well said.
Mon, 09/13/2010 - 00:43 — FRTothus (not verified)Great article! Well said. When the oligarchy says "jobs" they mean "profits".
Capitalism is based on exploitation. It is a corrupt system from top to bottom, and no amount of tinkering around the edges will change that fundamental truth.
Corporations are private tyrannies, and are completely incompatible with democracy.
"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both."
(Louis Brandeis, Supreme Court Justice)
Well said. If they dont give
Mon, 09/20/2010 - 00:43 — Anonymous (not verified)Well said. If they dont give up the tax breaks for the over $250k crowd it is criminal. keep the middle class
The rich are the rich
Mon, 09/20/2010 - 02:25 — Anonymous (not verified)The rich are the rich because they are the best. Now if you tax them they can simply move there money out of the country and if you keep fucking with them they will simply leave taking all there wealth with them.
The perception that small
Mon, 09/20/2010 - 04:22 — Anonymous (not verified)The perception that small businesses will be hurt by increases in taxes is false. 97% of small businesses are not affected, of the 3% that will be, many are sole-proprietor businesses, many of which are created to evade corporate taxes.
http://www.nytimes.com/2010/09/18/business/smallbusiness/18smallbiz.html
End voodoo economics
Mon, 09/20/2010 - 15:01 — Anonymous (not verified)End voodoo economics now!
Could it be more clear that the GOP serves only the interests of the ultra-rich?
What fools people would be to empower them again, esp. since they got us here in the first place . . .
You dont create jobs by
Mon, 09/20/2010 - 21:40 — Carlobarlo (not verified)You dont create jobs by giving tax breaks to the rich, you create an aristocracy. And we all know how aristocrats feel about the common people, just ask the French.
Let them eat freedom
Tue, 09/21/2010 - 01:41 — Kevin Schmidt (not verified)Let them eat freedom blades
If they really want a class war, then we should immediately start building guillotines.
If the rich want to leave
Tue, 09/21/2010 - 03:57 — Dick S (not verified)If the rich want to leave and take their money with them, let 'em. I'll help the @ssholse pack!
David Stockman notes that
Tue, 09/21/2010 - 21:27 — Anonymous (not verified)David Stockman notes that the morphed reincarnation of the Dixiecrats a la Raygun, f$#ked the economy. Bum steers like Rove, Armey are it's holdovers. Don't spare Bubba Clinton either, he didn't undo Reagan anything, but focused on creative debt with the likes of Rubin and Summers, further accelerating calamity. Taxes need to be rammed onto the filthy rich, this will only inconvenience Royalty, as they will race to get out of paying anything, which is what they've always done. Crooks.
Where are all these magic
Tue, 09/21/2010 - 21:28 — Anonymous (not verified)Where are all these magic small businesses that writers keep referring to? They employ the most Americans? Not sure about that. I believe McDonalds remains the number one employer.
People need to remember that
Wed, 09/22/2010 - 12:17 — Anonymous (not verified)People need to remember that Republicans have gotten their way on economic policy since Reagan, and it led to the biggest financial meltdown in 70 years. Now, they have ZERO new ideas. They have nothing but the same thing!
It would be lunacy to allow Republicans to take control of either chamber of Congress. As with Obama's election, Democrats and independents must get out in November and vote as if there's no tomorrow and grow the Democratic majority in Congress, so America's business won't be held up by the Senate.
Memory is short and we'll
Wed, 09/22/2010 - 14:39 — cokids (not verified)Memory is short and we'll replay this travesty again and again, I'm afraid! The Repubs torpedo the economy with their policies, the public votes dem. The Dems can't recover fast enough so voters vote REpub again...memory is short!
The Repubs reinstitute their policies; people hurt and vote Dem again. The Repubs sit on their cash and make Obama look bad. Short memoried people vote Repub again!
Why are we not talking about the likelihood that business is sitting on it's profits because they hate obama and don't wish to make him look good by employing people. That psychology will be reversed when Repubs are in office. They will work hard to make the Repubs look GOOD, so they might get re-elected. Why? Oh, why?
I thought that the biggest
Wed, 09/22/2010 - 16:22 — Floresta (not verified)I thought that the biggest US employer was WalMart. ??? Mc Donald's, WalMart, that kinda sez it all...
Are we STILL playing at
Wed, 09/22/2010 - 16:29 — Anonymous (not verified)Are we STILL playing at "trickle down"???
All I see is "trickle up" - and that defies the laws of physics. One day, one day...the money WILL come DOWN!
"Trickle on" is the term you
Wed, 09/22/2010 - 18:18 — brunssd (not verified)"Trickle on" is the term you are searching for, I believe.
"Trickle up" would be something like taking the defense budget and using it to rebuild the infrastructure by hiring the un(der)employed Davis-Bacon wages. The rich would still end up with the money but it would have to pass through some of us first.
The old trickle down theory
Mon, 10/04/2010 - 15:26 — Anonymous (not verified)The old trickle down theory was proved to be BS decades ago. Giving more money to the rich does not create jobs, it costs jobs. Unless you count military jobs since then the rich have more money to start more wars so they can make more money....