Paul Ryan explains why the millionaire tax causes unemployment to rise

From Fox News Sunday.

Partial transcript:

“If you tax something more, Chris, you get less of it,” Rep. Paul Ryan (R-WI) told Fox News’ Chris Wallace. “Class warfare, Chris, may make for really good politics, but it makes for rotten economics. We don’t need a system that seeks to divide people and prey on peoples’ fear, envy and anxiety. We need a system that creates jobs and innovation, and removes these barriers for entrepreneurs to go out and hire people. I’m afraid these kinds of tax increases don’t work.”

“This is being called the ‘Buffet rule” because it comes after Warren Buffet, the multi-billionaire owner of Berkshire Hathaway said, ‘I get so much of my money from capital gains, I end up paying a lower effective tax rate than my secretary who gets her money in salary,’” Wallace noted. “What about the question of fairness, sir?”

“What he forgets to mention is that is a double tax,” Ryan insisted. “Capital gains and dividends are taxes on money that has already been taxed once before based on income… It looks like the president wants to move down the class warfare path. Class warfare will simply divide the country more, attack job creators, divide people and it doesn’t grow the economy.”

That’s the way it is – we may not like it, but the rich create jobs. If you attach the rich, they move their capital overseas and the jobs go with the capital. That’s the way the world works. If you tax job creators less, and regulate them less, the jobs stay here.

12 thoughts on “Paul Ryan explains why the millionaire tax causes unemployment to rise”

  1. If the rich create jobs and we have some of the lowest tax rates in US history, then where are all these jobs you speak of and why did we have lower rates of unemployment during times of higher tax rates in the past?

    Like

    1. We don’t have some of the lowest taxes. Our federal corporate tax rate is the second highest in the world at 35%, rising to near 40% once state and local taxes are added in.

      The different is that we are now running deficits TEN TIMES what Bush and the Republican House and Senate had in 2006/2007, and then we have Obamacare, and the Dodd-Frank regulation bill.

      Like

      1. I didn’t say lowest in the world, I said lowest in U.S. history – as in the fact that since WWII the top tax rate is significantly lower than it was during some of our most productive and creative years. it wasn’t until Kennedy, Reagan and Clinton that it got this low, yet with an upper tax rate that is lower than almost the entirety of the twentieth century we’re still not producing jobs.

        As for the corporate tax rate, yes we do have one of the highest corporate tax rates but we have one of the lowest realized tax rates. Meaning, that no other country allows the type of write-offs we do, hence the reason all of the Buffet’s shell companies only pay about 4% in corporate taxes. Add on top of that, our corporation can defer taxex – you heard that right, they don’t have to pay taxes right away, they can defer those payments for decades (or until they go bankrupt at which point they never paid taxes and will not have to). So to claim that our tax rates are prohibit is (1) really ingenuous, (2) ignoring history.

        Like

  2. WK is absolutely right and it’s really important that the state and local taxes are factored in. I run a small business and I am paying well over $8,000 dollars of taxes before I ever get to income taxes! Then of course it is in my best interest to look for ways to shelter the income so I pay less in income tax. My business has it’s own bills to pay and after that there must be seed, or reinvestment money, which must come from the profit made in the business. If companies are not allowed profits, they are not allowed growth. It’s very important to me that I can grow my business as large as I can because I have four small children. And this is another thing that is often forgotten. The business owner is not just an employer fulfilling the needs of his employees, but and individual with needs as well. Can we remember that the person that created the business might deserve to get somethimg from it at the end of the day?

    Like

    1. I do agree with you Mariangela, and I understand that we cannot expects businesses to employ people if they can’t make any money. My parents also run a business so I understand these things from them.

      Like

    2. An the US tax code gives you plenty of shelters – more in fact than any other nation on earth. If you convert to a corporation, then you don’t have to pay any taxes – you can defer them. How do I know, I helped my dad transform his farm in to this and deferred all his taxes. Then when you want to dissolve the corporation, you sell off the assets and bankrupt the business – you’ve effectively paid no taxes what-so-ever. While the business is running, there are lots of tricks you can use – profit-sharing, 401k contributions, business equipment purchases, asset depreciation, etc that allows you to protect money from taxes.

      In the end, you’re forgetting too that you’re (you more so being a female) allowed to even start a business without the local warlord demanding a huge stipend (http://www.examiner.com/drug-cartel-in-national/cartels-now-extorting-teachers-killing-schoolchildren-mexico) – infrastructure and stable societies don’t happen on accident, assuming you’re not a young earth creationist, society has only been around the last 6000 years of human’s 200,000+ year existence – it’s a rare occurrence, and even rarer that it’s as stable and as advanced as that of the western societies.

      Like

      1. The tax tricks to which you refer are the “loopholes” and deductions people like Paul Ryan and others want to see closed in order to simplify the tax code. The savings in tax attorneys and accountants alone will make that worth doing.

        Like

        1. I strongly doubt that as any closure of deductions or loopholes is seen as a tax increase by the GOP and hence off the table. The GOP wants only to cut spending (I agree that we need to drastically cut spending so don’t take that as being derisive); nothing that I can see indicates any desire to increase taxes or reform the tax code (they may want to rewrite it, but definitely not reform it).

          Like

  3. Jerry please! This is crazy, the tax deductions one is allowed to take are not loopholes! They are built into the tax structure for the purpose that WK mentioned. It’s not “if” the rich create jobs, it’s that they create jobs. Because the rich create jobs the income tax rules are structured to benefit the economy. The reason that non-business owners pay higher income tax is because they contribute less to the economy in other ways and require more from the government and are, as a whole, a drain on the economy. Farmers, in that they receive government subsidies are also a drain on the system in countries like Canada and the US and with the exception of giants like Tyson and Maple Leaf are poor contributors to job creation.

    Like

    1. The only place I mention loopholes is in response to Marshall Art. As for the rest of your comment, you will be hard pressed to find any real evidence that backs any of it up. Most peer reviewed economic literature I can find indicates that the main engine of job creation in the US is small business (and not using the US government definition of small which is up to 1500 people), especially post 2008. Most of those in the US that make over several million do so by capital gains which does not create jobs in the traditional sense (CEO bonus pay falls in to this when it consists of a large number of stock options) – so in addition to not creating jobs, it’s also taxed at a significantly lower rate and falls under a class economics rent argument.

      As for your statement on the common worker contributing less and draining more – I would love proof of that, otherwise I’m calling it out as pure inflamatory rhetoric. Most small farmers don’t receive subsidies – you have to be a large operation or a minority in order to receive them. My father’s farm is 2,500 acres and has been going since about 1969 and he has never qualified for one subsidy while the big four companies that control 90% of the US’s food production get hundreds of millions a year. (you can get subsidies if you want to grow biofuel crops – which is one of the only reasons E85 is even remotely affordable – it’s subsidized).

      I would also like to see any proof you have that tyson or any of the other large food conglomerates create permanent jobs with family supporting wages (even $12 – $18 hour) for any group other than migrant workers (who do not make even close to $12/hr)…farming and related sectors accounts for less than 1% of U.S. employment today and the average farmer makes around $56K a year.

      Like

  4. @ Jerry It’s always great when a farm can run without the aid of subsidies, and farms like your father’s should be the only ones allowed to continue. Next, your previous explanation of how companies avoid taxes was a ludicrous, fallacious argument, in that it is not tax trategy of tax avoidence, but a scam, and not something that regularly occurs in business. No business could operate consistently and participate in a tax scam like the one you described. Imagine WalMart or AIG or Bank of America or Tyson or Macy’s just declaring bankruptcy and re-naming themselves whenever it became impossible to continue defer their taxes. Which taxes are being differed? When a company is receiving an income tax deduction, they are doing so because they have already payed that money into the economy or in taxes somewhere else. They aren’t deferring. Here’s a practical example based on the numbers I stated previously. Before I ever fill out my income tax form I have already payed 8 Gs in property taxes on all the properties I own to run my business. That $8,000 becomes a deduction on my income tax form, because you can’t tax me on money I’ve already been taxed on! The money is GONE!!! Next, you said the rich make money from Capital Gains which is taxed lower. Um, hello? It’s taxed lower because you can’t deduct the original money used for the investment. You payed taxes on your money and then you made money off it and the government wants to come back and tax you twice on the same money! What if your bank account worked that way? What if you put your money in and had to be charged a fee to put your money in and then had to be charged another fee to take your money out? THAT IS WHAT BUSINESS HAS TO DEAL WITH!!!! Thank God, it’s at a lower tax rate. The calculation is 50% in Canada, I can only guess it’s roughly the same in the US. Did you even read the article?

    excerpt from WK’s article above:
    What he forgets to mention is that is a double tax,” Ryan insisted. “Capital gains and dividends are taxes on money that has already been taxed once before based on income… It looks like the president wants to move down the class warfare path. Class warfare will simply divide the country more, attack job creators, divide people and it doesn’t grow the economy.”

    Which brings me to my next point @Your Beliefs Are Wrong

    “…is it really that bad to ask them to pay the same as those around them? The GOP believes this is class warfare; they claim to tax the richest among us (and corporations are considered individuals) at the same…”

    Um no, taxing is not class warfare, and it would be GREAT to ask everyone to pay the same as those around them. It’s called a FLAT TAX. Go find a petition and sign it immediately!

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s