Raise Taxes on Rich to Reward True Job Creators

Raise Taxes on Rich to Reward True Job Creators

Postby DDEATH » Fri Dec 02, 2011 5:44 pm

Raise Taxes on Rich to Reward True Job Creators: Nick Hanauer
December 01, 2011, 8:53 PM EST
.

Dec. 1 (Bloomberg) -- It is a tenet of American economic beliefs, and an article of faith for Republicans that is seldom contested by Democrats: If taxes are raised on the rich, job creation will stop.

Trouble is, sometimes the things that we know to be true are dead wrong. For the larger part of human history, for example, people were sure that the sun circles the Earth and that we are at the center of the universe. It doesn’t, and we aren’t. The conventional wisdom that the rich and businesses are our nation’s “job creators” is every bit as false.

I’m a very rich person. As an entrepreneur and venture capitalist, I’ve started or helped get off the ground dozens of companies in industries including manufacturing, retail, medical services, the Internet and software. I founded the Internet media company aQuantive Inc., which was acquired by Microsoft Corp. in 2007 for $6.4 billion. I was also the first non-family investor in Amazon.com Inc.

Even so, I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.

That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.

Theory of Evolution

When businesspeople take credit for creating jobs, it is like squirrels taking credit for creating evolution. In fact, it’s the other way around.

It is unquestionably true that without entrepreneurs and investors, you can’t have a dynamic and growing capitalist economy. But it’s equally true that without consumers, you can’t have entrepreneurs and investors. And the more we have happy customers with lots of disposable income, the better our businesses will do.

That’s why our current policies are so upside down. When the American middle class defends a tax system in which the lion’s share of benefits accrues to the richest, all in the name of job creation, all that happens is that the rich get richer.

And that’s what has been happening in the U.S. for the last 30 years.

Since 1980, the share of the nation’s income for fat cats like me in the top 0.1 percent has increased a shocking 400 percent, while the share for the bottom 50 percent of Americans has declined 33 percent. At the same time, effective tax rates on the superwealthy fell to 16.6 percent in 2007, from 42 percent at the peak of U.S. productivity in the early 1960s, and about 30 percent during the expansion of the 1990s. In my case, that means that this year, I paid an 11 percent rate on an eight-figure income.

One reason this policy is so wrong-headed is that there can never be enough superrich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the average American, but we don’t buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. Like everyone else, I go out to eat with friends and family only occasionally.

It’s true that we do spend a lot more than the average family. Yet the one truly expensive line item in our budget is our airplane (which, by the way, was manufactured in France by Dassault Aviation SA), and those annual costs are mostly for fuel (from the Middle East). It’s just crazy to believe that any of this is more beneficial to our economy than hiring more teachers or police officers or investing in our infrastructure.

More Shoppers Needed

I can’t buy enough of anything to make up for the fact that millions of unemployed and underemployed Americans can’t buy any new clothes or enjoy any meals out. Or to make up for the decreasing consumption of the tens of millions of middle-class families that are barely squeaking by, buried by spiraling costs and trapped by stagnant or declining wages.

If the average American family still got the same share of income they earned in 1980, they would have an astounding $13,000 more in their pockets a year. It’s worth pausing to consider what our economy would be like today if middle-class consumers had that additional income to spend.

It is mathematically impossible to invest enough in our economy and our country to sustain the middle class (our customers) without taxing the top 1 percent at reasonable levels again. Shifting the burden from the 99 percent to the 1 percent is the surest and best way to get our consumer-based economy rolling again.

Significant tax increases on the about $1.5 trillion in collective income of those of us in the top 1 percent could create hundreds of billions of dollars to invest in our economy, rather than letting it pile up in a few bank accounts like a huge clot in our nation’s economic circulatory system.

Consider, for example, that a puny 3 percent surtax on incomes above $1 million would be enough to maintain and expand the current payroll tax cut beyond December, preventing a $1,000 increase on the average worker’s taxes at the worst possible time for the economy. With a few more pennies on the dollar, we could invest in rebuilding schools and infrastructure. And even if we imposed a millionaires’ surtax and rolled back the Bush- era tax cuts for those at the top, the taxes on the richest Americans would still be historically low, and their incomes would still be astronomically high.

We’ve had it backward for the last 30 years. Rich businesspeople like me don’t create jobs. Middle-class consumers do, and when they thrive, U.S. businesses grow and profit. That’s why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich.

So let’s give a break to the true job creators. Let’s tax the rich like we once did and use that money to spur growth by putting purchasing power back in the hands of the middle class. And let’s remember that capitalists without customers are out of business.

(Nick Hanauer is a founder of Second Avenue Partners, a venture capital company in Seattle specializing in early state startups and emerging technology. He has helped launch more than 20 companies, including aQuantive Inc. and Amazon.com, and is the co-author of two books, “The True Patriot” and “The Gardens of Democracy.” The opinions expressed are his own.)
Def: FOXBOT - One who mindlessly watches FOX News and believes everything they say, totally disregarding logic and the obvious.
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Re: Raise Taxes on Rich to Reward True Job Creators

Postby daisycutter » Fri Dec 02, 2011 8:27 pm

There goes DDEATH yet again dying to "tax the rich". Once again the revenue gain from that tax, will never be realized because those evil, greedy, "rich people" will change the way they do business to escape the tax DDEATH is so inclined to impose on them to make himself feel better.You can tax the "rich" 100% and confiscate all their wealth, and it still wouldn't put a major dent in the federal debt, because there are simply not enough wealthy people to cover our big time spending problem. Instead we must get ENTITLEMENTS under control, and enact many of the proposals of Obama's very own debt commission (which he completely ignored) called SIMPSON- BOWLES. If Obama had any balls, or any leadership skills, he would propose many of the bullet points of the SIMPSON-BOWLES commission, instead of being MIA for the past three years!
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Re: Raise Taxes on Rich to Reward True Job Creators

Postby keepitreal » Fri Dec 02, 2011 10:46 pm

I don't think Daisy's in Kansas anymore.... :lol: :lol:

Ya just can't create jobs without demand...and you can't create demand without disposable income...and ya don't do that by cutting people back to 20 hours a week, lower wages and no benefits...

You cannot systematically dismantle your consumer base and expect to survive.

DOH !! :o
Tax and Spend I can understand. I can even understand Borrow and Spend. But Borrow and give Billionaires tax cuts? That I have a problem with.
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Re: Raise Taxes on Rich to Reward True Job Creators

Postby DDEATH » Sat Dec 03, 2011 7:15 am

I don't think Daisy even read the article.........

The middle class is shrinking and the ranks pf the poor are swelling. Eventually, somethings got to give. That something may be our way of life! :cry:
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Re: Raise Taxes on Rich to Reward True Job Creators

Postby WindowMan » Sat Dec 03, 2011 8:03 am

One of the 1% Explains Why Consumers Are The Real Job Creators
December 1, 2011
By Sarah Jones



“When businesspeople take credit for creating jobs, it is like squirrels taking credit for creating evolution. In fact, it’s the other way around.”

Nick Hanauer is a founder of Second Avenue Partners, a venture capital company in Seattle specializing in early state startups and emerging technology. He has helped launch more than 20 companies, including aQuantive Inc. and Amazon.com, and is the co-author of two books, “The True Patriot” and “The Gardens of Democracy.” He also wrote the above quote for an op-ed in Bloomberg.

Explaining how he, as a very rich person, buys only a few more items (albeit more expensive ones like planes but this was manufactured in France) than the average family, Nick backs up his findings that the job creators are the consumers who create the demand for the product business people like himself create.

From Bloomberg:


I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.

That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.

Sure, this is a duh moment but it flies in the face of everything the right and indeed, the middle and the soft left, have believed for some thirty odd years. Instead of questioning these Reaganesque ideas, Americans swallowed them without any evidence that they worked. We were told to disagree was to hate capitalism and to hate capitalism was to hate America. Next up in the system of lies: how the communist socialists liberals ruined America.

Of course, we have no proof of any such thing since we have never had anything like socialism here. We might want to give it a try, though, since we’ve tried the opposite extreme and it doesn’t work.

What they don’t want you to know is that you are the power behind capitalism. You and your middle class job, your small business that allows you to make purchases that drive the economy, your union wages that give you retirement security and health insurance so that you have extra cash to buy things you don’t need for your family.

YOU are the job creators.

As such, you are entitled to special treatment; you should be honored for simply existing. For having the strength to go to work every day, you should be given gifts from the Federal Reserve to the tune of trillions of dollars. After all, without YOU there would be no economy. You are, indeed, too big to fail.

When the 1%’s puppets criticize the American people, when they say we are lazy, hippies, radicals, socialists all because we want some measure of economic justice, what they’re really trying to do is put you on the defensive lest you look behind you.

Because behind you is the truth. Your years of hard labor, your years raising children, your years spent in school to make something of yourself, your efforts to be a good citizen, these are the things that drive this great capitalistic economy – an economy that is supposed to be driven by meritocracy rather than favoritism. Your hard work has lifted the 1% until their income has increased by 400 percent while yours has declined by 33 percent.

And they call you a radical for being angry?



In fact, you are the logical one. You are the Good Samaritan and citizen who never asked for more than your fair share and were willing to work hard for it. They told you the nation was suffering and so you swallowed the hit to your 401K during the Bush crash with stoicism. You only wanted what was best for your country.

Sure, you were scared, but you believed that we were all in this boat together.

Now that you know better, now that you see how your hard work was labeled laziness and Republicans are telling us that they can’t pass payroll tax cuts for middle class Americans if the top 1% of God-like “job creators” have to pay for it, you’re beginning to wonder why you aren’t getting any special treatment.

After all, if being a job creator is so darn great, why aren’t the Republicans kneeling down to help you? Why do they only care about tax cuts for the top 1%, even though their trickle down lies have been exposed as nothing but a shell game?

For years I’ve been saying that true conservatives know the current ideology of the Republican Party is anything but free market capitalism. It is not truly conservatism. And now we see the honest ones surfacing. They don’t want their ideology tainted with the stain of this experiment gone wrong any more than we all want to suffer from its implementation any more.

It’s not real conservatives who are to blame for this debacle; it’s the Fox propaganda puppets for the corporate psychopaths and the Republicans who left their true values behind. It’s dishonest conservative writers and pundits who somehow managed to keep a straight face while selling corporate tax cuts per state as a free market idea (see Wisconsin under Walker post corporate tax cuts – huge loss of private sector jobs – ironies abound).

It’s people like Newt Gingrich who is known as their idea man, but he’s also the same person who wrote a book so dishonest and full of paranoid, unproven accusations about the “tax and spend commie socialist agenda” of the Democrats that his readers no doubt failed to ask themselves why the debt was driven up under the Republicans and who was supposed to pay for those wars and why were tax cuts given that were unpaid for?

There isn’t an honest Republican on the national stage right now, and even Jon Huntsman, whom I respect, sells tax cuts and pro business talk as the answer to our financial crisis. Heck, given his lack of ugly stupidity, he might as well run as a Blue Dog Democrat.

The answer to our financial crisis lay with fixing the middle class.

The answer to our financial crisis is a booming middle class with disposable income.

The answer to our financial crisis is to support the real job creators.

In other words, the answer to our financial crisis is to give the 99% what they worked for, earned, and need in order to drive this economy with demand.

Anyone who tells you they believe in the free market system but don’t understand the necessity of demand is being dishonest with you. If you are protesting Wall Street, it’s not because you hate capitalism; it’s because you want this country to succeed and it can’t succeed when the economic system is based on tenuous lies meant to enrich the top 1%.

Real patriots don’t hate the 99%; without the 99%, this economy is dead.

So, to all of the Fox News puppets and the Wall Street Journal (Murdoch again) liars, I say, man up. Have the guts to stand by the ideology you tout. Do us all a favor and look in the mirror. Explain to us how this is socialism and how demand is not necessary for a healthy economy. Sure, you tricked many of us into spending what we didn’t have and thereby propping up your lie about tax cuts with easy mortgages and lines of credit, but that crutch is gone now.

All that’s left is the wreckage of the truth; these “conservatives” built their faux economy on governmental favoritism, lies, faulty mortgage products meant to enrich themselves and create a false demand, shell games called derivatives, and so many more cons via deregulation of the financial industry.

They told us that deregulation would make us thrive, that the free market would sort out the winners and losers and force companies to be accountable but clearly that isn’t true, as they also worked to get secret bail outs for the companies that should have failed.

Instead we have corporations run by psychopaths with greed as the only American value. Nothing will stop that machine, and without the government to protect the people from the machine, we have abuses against labor and poisoning of the people, because you see, the unfettered free market as implemented by the Republican Party is an unmitigated failure of global proportions.

They wrecked the real job creators and decimated their power, destroying our economy in the process. They don’t have an answer as to how capitalism works without demand. They want us to keep buying things but they don’t think we’re entitled to a $40,000 a year teacher’s salary. In fact, they want public sector workers to pay for the payroll tax cuts. How exactly would that stimulate the economy?

What exactly has the 1% done for us (and by us, I mean our country) lately?

What say you now, 1%?


Makes sense to me.. Anytime a tax break for the middle class or extension for unemployment benefits goes on the table, the GOP wants to bleed the middle class with cuts in their entitlements or elimination of federal jobs all of which will hurt the economy. The economy is what the middle class spends on products and services and without the middle class this economy will be dead as the article states!
We cannot solve our problems with the same thinking we used when we created them.
Albert Einstein
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Re: Raise Taxes on Rich to Reward True Job Creators

Postby daisycutter » Sun Dec 04, 2011 11:23 am

Can anyone name me one country that has prospered, by enacting confiscatory tax rates on its most productive citizens? You can't because there is none! When government becomes to big (like it is today) that countries citizens become smaller! You are witnessing the decline of a once great empire, because of laziness, corruption of its politicians, and the ENTITEMENT mentality that has taken hold in our country. It's only a matter of time before this all comes crashes down, and America becomes a third world country. Time is running short.
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Re: Raise Taxes on Rich to Reward True Job Creators

Postby DazedandConfused » Sun Dec 04, 2011 1:14 pm

The fallacy is the concept that because a person is in the upper 1% of the population that they are more productive, when in fact they have the power to affect the taxing legislation to ensure a continuation of their gluttony. Would a doctor who donates his services be less productive than a Hollywood Plastic Surgeon who overcharges for his services? Obviously the Hollywood surgeon would make more money, and therefore must be a more productive member of society. The logic does not follow. You are equating avarice with productivity.

We are so accustomed to living in an oligarchy that we can no longer grasp reality. Some conservatives "get" the concept of everyone earning their way, but ignore the presence of the oligarchy, and even defend it with a killers pride. Liberals have the distorted view that we can make everything equal, when in fact evolution teaches us the fact that survival of the fittest is the law of nature. We are wasting valuable resources trying to prop up peoples who are not meant to continue. Evolution is still at work. Man is not meant to survive in a desert, nor cease to gain knowledge and live in ignorance and disease. Let evolution take its course.
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and breaking into our houses and killing us to get what they want." UCanIt
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Re: Raise Taxes on Rich to Reward True Job Creators

Postby daisycutter » Sun Dec 04, 2011 1:49 pm

Dazed, i never got the movement to "tax the rich" to make yourself feel better. This only leads to "equalized misery". When the majority of this country believes that it can grab the money of the top 20% and re-distribute that money to people who don't earn it, then we as a country are in big phukin trouble! Instead I would like to expand the pie, so EVERYONE has a shot at being wealthy. When government gets to big, and crowds out the private sector (like it is today) then that country is surely headed for economic decline.

When politicians or citizens somehow think they can be the final arbiter on "excessive wealth" or being "to greedy" then we are certainly headed for decline. Its nobody's damn business how much a private citizen earns, as long as he obeys the law, he should be able to earn whatever he or she wants to. If I work harder then my neighbor, then I deserve more, and deserve to enjoy the fruits of my labor.
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Re: Raise Taxes on Rich to Reward True Job Creators

Postby DazedandConfused » Sun Dec 04, 2011 2:40 pm

Daisy, it is the twisted version of capitalism that is destroying conservatism. An economic system that places 60% of the capital gains in the hands of .1% of the population is bound to create revolution. That is like telling 99.99% of the peoples to "go F**k themselves, we have the power to make the laws and there is nothing you can do about it". This oligarchy is shared by both parties, and this is more about the people vs the entire government. As the poorer population grows there will end up with bloodshed in the streets. It would be in the best interest of the wealthy to acknowledge this tide, and try to control it before it goes any further. Another problem that the Republicans ignore is that this poorer population is ignorant and easily controlled by subversive forces. Give a little now or lose it all very soon.
"The whole reason welfare and foodstamps exist, is so those that are receiving won't be rioting in the street,
and breaking into our houses and killing us to get what they want." UCanIt
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Re: Raise Taxes on Rich to Reward True Job Creators

Postby daisycutter » Sun Dec 04, 2011 5:23 pm

Dazed, I believe that America will turn into Greece within two years, if we don't make the budget cuts we have to. When debt to GDP is about equal you know you have a problem on your hands. I fully expect civil discourse, and violence to come to the streets of America in the coming year or two. The federal government can't possibly meet all its obligations, especially our entitlements (medicare, social security, medicaid obligations) Taxing the "rich" might quell the anger temporarily, but it isn't the answer long term. Deep sacrifice is needed by all Americans, and i'm afraid the average American doesn't have the discipline that's needed to fix our entitlement problem. The vast majority feel they are "entitled" and anger, and violence will be the consequence of being told the truth.
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