Is this Pro-Corporate Tax Cut Argument Valid?

[william the wie]

Is the following argument about how corporate tax cuts will lead to greater wages for workers logical?

Corporate tax cuts --> more companies willing to provide goods at lower prices in order to gain competitive edge --> shift supply curve (of goods) to the right --> equilibrium price of goods 'moves' to the right --> more demand of goods --> companies need to hire more workers to keep up with demand --> demand curve (of labor) shifts to right --> equilibrium price (of labor) shifts upward and to the right, resulting in an increase in wages.
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Does simply moving the equilibrium price of goods (without actually shifting the demand curve) indicate a change in demand that would result in companies hiring more workers?

Is there anything (else) wrong with the argument presented?

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Yes.

Corporations use their tax windfall to enrich investors and shareholders, they don’t seek to create new jobs.

Indeed, corporations plan on continuing to cut jobs to increase profits.

When you say "Yes", what is that in response to? The thing you are seemingly saying "yes" to is arguing that the corporate tax cut will beneficial to the country because it will increase wages. Is that your view?

How would he know? You didn't phrase your post in CNN talking points.

 

[Boss]

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

Well this is simple. The more money consumers have the more they tend to spend. More jobs are beneficial because of supply and demand. The more jobs available, the more demand is created for labor, raising wages to meet supply.

 

[danielpalos]

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

Well this is simple. The more money consumers have the more they tend to spend. More jobs are beneficial because of supply and demand. The more jobs available, the more demand is created for labor, raising wages to meet supply.

Healthcare reform and a fifteen dollar an hour minimum wage is better.

 

[Boss]

Healthcare reform and a fifteen dollar an hour minimum wage is better.

Well, you had healthcare reform and it was a disaster. And increasing the mandatory minimum wage costs jobs... always has, always will. Not only does it cost jobs, it hurts those at the lowest end of the scale the worst. Why would you want to punish the poor?

 

[danielpalos]

Healthcare reform and a fifteen dollar an hour minimum wage is better.

Well, you had healthcare reform and it was a disaster. And increasing the mandatory minimum wage costs jobs... always has, always will. Not only does it cost jobs, it hurts those at the lowest end of the scale the worst. Why would you want to punish the poor?

More coverage for more people is not a disaster. And, a fifteen dollar an hour minimum wage helps the poor not be so dependent on government services.