pknopp
Diamond Member
- Jul 22, 2019
- 72,945
- 28,423
When someone has $200 million in an account they aren't going to go out and say "Hey, I got a tax cut, I can now afford to start my business".
What starts a business is a need. People who have nothing have meet that need.
Yes, everyone is Scrooge McDuck with swimming pools filled with gold coins, I get it.
But the childish fantasy of the left has utterly no connection to reality.
In the real world taxes are very important. Most Communists have never had a finance class in their life, much less a class on basic economics. They can't read a balance sheet or income statement. They couldn't produce a capital investment repayment plan if their life depended on it. But in real life, that's how things work. If I want to expand a business, I have to show that the expansion plan will repay the capital employed, a concept we call ROCE, "return on capital employed". I must demonstrate to the bank or board of directors that the investment will pay back in a certain number of years or the project will not be funded. Another concept that Communists don't grasp is EBIT, which is "earnings before interest and taxes." What follows are two critical elements on an income statement - interest on debts, and taxes. The impact of these two is enormous and heavily impacts any business decision.
Yes, I'm getting into grown up talk, which is not what leftists understand. But in the world of finance and business, this is how things work. If the interest on debt for expansion erodes the payback, if the taxes on EBIT consume the return, then expansion will not happen. The jobs created by that expansion will not happen.
Need creates jobs, not tax cuts. Simply "expanding" your business does not create a need and if there is a need it's going to be met by someone, tax cuts or not.
As I've been saying since the reagan years:
No company is going to hire someone to just stand around all day doing nothing. If they don't have the work, they don't need more employees.
The only reason a business will hire more workers is if there is more work to do than the existing staff of workers can handle in a regular 8 hour work day.
If that is happening, they are having more sales. If that is happening the company is making more money and the last thing they need is a tax cut.
It's simple capitalism supply and demand.
A company can offer all the supply they want. If there is no demand their supply is worthless.
If there is a demand, their supply is worth capital and the last thing a company needs is a tax cut.
It is not the government's job to give anyone a raise or pay anyone working outside the government. That is the responsibility of the employer. The government is responsible for making sure that employer is paying a living wage, proper benefits with safe and proper working conditions for the employee. Employers aren't going to do that out of the goodness of their hearts. They only care about money. The only way to make sure the employer is properly paying employees with proper working conditions is through proper wage laws and working condition regulations.
If people aren't making enough money to live on, no tax cut will ever help them. A raise in pay will. The federal minimum wage has not been increased since the bush boy years. Get the government to do their job of increasing the minimum wage. Cutting taxes for a few years isn't going to do much beyond create more debt and make a small amount of filthy rich people even more filthy rich.
The conservative economic theory is a lie which only results in the destruction of an economy.
How many times does the nation have to go through it before we learn?
I'm not sure we ever will which is why I am OK with it all falling apart.