Tag Archives: Consequences

Do “tax cuts for the rich” have a track record of creating jobs?

Can complaining about “the rich” create more jobs than passing across-the-board tax cuts?

Let’s see what the record shows.

Excerpt:

Why do we seem so helpless in solving our current mess? A big reason is the shocking lack of basic economic literacy among many of our political leaders. Case in point: Ohio Democratic Sen. Sherrod Brown.

Brown ripped into GOP Rep. Eric Cantor, saying he “either failed English class or failed logic class or failed history class because these tax cuts for the rich that Bush did twice … resulted in very little economic growth. We saw only 1 million jobs created in the Bush years, 22 million created in the Clinton years, when we reached a balanced budget with a fairer tax system.”

This is false. From 2002, the last year before the cuts, to 2007, the last year before the financial meltdown, the real economy expanded by $1.77 trillion, or 15.2%. “Very little” growth? Jobs increased by 7.77 million, business investment surged 38%, and personal net worth soared 56%. Brown is wrong on every point.

Yes, gross domestic product did fall sharply in 2008 as the financial meltdown hit. But no reputable economist maintains the financial panic was a result of the Bush tax cuts.

No, the declines in the economy are to be blamed on Nancy Pelosi and Harry Reid, who were running the House and Senate starting in January 2007. It was their ballgame from that point on.

More:

Laughably, Brown talks about how “we” reached a balanced budget during the Clinton years. What do you mean “we,” senator? Since budgets are written and passed by Congress, and only approved by the president, Brown must know that it was Republicans who balanced the budget — not Democrats.

That’s right, a GOP-led Congress controlled the spending that led to the surpluses of the late 1990s. It also proposed welfare reform and pushed through cap-gains tax cuts that helped the economy boom. To his credit, President Clinton signed these initiatives into law — but only after much political arm-twisting.

[…]He went on to say: “There is no real history illustrating that these tax cuts for the rich result in jobs. It’s extending unemployment benefits that creates economic activity that creates jobs, not giving a millionaire an extra … $30,000 in tax cuts they likely won’t spend.”

“No real history”? Taxes were cut on high-income earners in the 1920s (Coolidge), 1960s (Kennedy), 1980s (Reagan) and again in the 2000s (Bush). These cuts benefited the rich and everyone else. In all these cases, jobs boomed after tax cuts. In fact, history shows that the best way to boost jobs is to cut taxes on the rich.

Democrats don’t know how to create jobs. They think that taxing and regulating businesses causes businesses to create jobs. It’s like if government walked up to a runner at the start line, stole his sneakers (taxes) and put a backpack full of dirt (regulations) on his back, and then told him to run faster. Having less money after taxes = fewer jobs. Spending more time complying with regulation = less time for running your business = fewer jobs. The Democrat policies make no sense, except to people with limited real life experience working in the private sector or running a business of their own.

In which I blame the coffee manufacturer for making bad coffee

This morning, I was contemplating whether to go downstairs and buy a cup of coffee for $1.25 from the coffee shop on the first floor, or whether to take a cup of free coffee from the kitchen on the 4th floor where I work. I like to have things that are free because then I do not have to work for them. Besides, I can spend more time watching TV if I don’t work as hard to buy the pay-coffee.

I was pretty sure that coffee that is sold by the small business on the first floor for profit would taste the same as coffee that is based on a community of coffee drinkers on our floor who just contribute whatever they want to out of the goodness of their hearts. To tell you the truth, it’s not something I really want to put that much thought into, I just expected that the world would conform to my intuitions and emotions.

So I snuck into the kitchen and poured myself a cup of the free coffee and snuck out again. I skulked back to my desk and sat down to drink the free coffee.

Imagine my horror at finding out that free coffee tastes like raw sewage!

Imagine! Free coffee doesn’t taste as good as coffee you have to pay for! How unfair! I hate this coffee! It’s weak! It’s cowardly! It’s lazy! It isn’t meeting my needs and expectations! It isn’t making me happy! It’s to blame for all of my problems! I want to sue this coffee manufacturer in court! I want everyone to condemn them! I demand justice! This coffee is to blame for my tires being underinflated! This coffee is to blame for me not going to the gym! Why is this coffee judging me? Why am I being marginalized and excluded?

Why, oh, why did God make coffee that is so bad? How could a loving God allow me to suffer from this bad coffee that I freely chose instead of pay-coffee? Shouldn’t God give me free coffee that doesn’t taste like sewage? Oh, woe is me! Why doesn’t anyone care about my needs? Why do other rich people have coffee that tastes good, and not me? Why are all my friends drinking good coffee, while I am forced by evil corporations to settle for sewage coffee? We should have a government-run social program to provide me with good coffee for free!

Do you know what I should do? I’ll tell you. I should take control of this coffee corporation. I should force them to give me free coffee for the rest of my life! After all, they are to blame for making the bad coffee. I shouldn’t have to pay for coffee! It’s my right! I have a right to the same coffee as people who go further away and who work hard and who pay for their coffee! I’m being discriminated against! There is no way that I should have to be. There is nothing that I should have to do. I should just get all the goodies in life and never have to give anything back to anyone, if I don’t feel like it.

Do you know what would be really good? A faucet that poured hot coffee with Splenda and cream. I think i’ll go see if we have that in the kitchen. I know we have water, so how hard can it be to get hot coffee with cream and Splenda, too?

Hey, I wonder if I could also get free back rubs? And free candy? I like candy! So I should get candy, too, right?

Boeing builds new 787 plant in South Carolina to escape Washington Democrats

You can’t pass regulations and taxes on corporations and then expect them to supply residents of your state with jobs. They will move to another state, and eventually, to another country.

Consider this commentary from Illiquid Assets. (H/T ECM)

Excerpt:

Two stories jumped out at me this morning the first was Boeing backing up its warning to Washington State politicians that they needed to reform the business environment and taxation model or lose future business investment and jobs. The response from the State was a whole new plan with localized Cap and Trade via the Western Climate Initiative, no reform of labor laws that allowed a protracted Union strike that shut down Boeing just as the world was starting its slip into recession combined with and other Green initiatives sure to drive up operating and labor costs. So Boeing has decided to open the second assembly line for the 787, not in Washington State, but in South Carolina and the politicians in Olympia claim they did not see it coming. South Carolina has a lower tax rate and a “Right to Work” law that means you do not have to join a union to work at a union business.

A right-to-work law means that the corporation does not have to be shackled by the demands of corrupt leftist unions, who are largely responsible for driving the American auto industry into the ground, in my opinion.

And now, consider this statement from Republican State Rep. Dan Christiansen. (H/T Sound Politics via iPandora)

Excerpt:

It’s extremely disappointing that Boeing has chosen South Carolina over Washington, but not surprising at all. Boeing has been very critical of our state’s difficult regulatory atmosphere. At the end of the day, it has to be able to compete successfully on an international scale, especially against Airbus. Instead of providing a level playing field, Washington has consistently put up barriers that make it difficult not only for Boeing to compete, but also for other employers throughout our state.

It’s been no secret that other states have been courting Boeing for years. Boeing has tried to make it work here. However, it has gotten to a point with unemployment insurance issues, regulatory burdens, business and occupation taxes, and recently, the governor being willing to consider tax increases, that Washington is no longer a place where Boeing can be competitive.

In South Carolina, it took only days for Boeing to get the permits it needs to move forward with the second 787 plant. In Washington, it would take years. That’s one of many examples in which our state has not been helpful and has stood in the way of the ability for Boeing to successfully compete here.

When Boeing decided several years ago to move its headquarters from Seattle to Chicago, many of my House Republican colleagues and I warned that unless the Legislature was willing to make reforms to improve the state’s business climate, we may see further departures. The governor and the majority party have been in denial about concerns of job providers and now our predictions are unfortunately coming true.

We must also remember this is not just about Boeing. Many other employers rely on Boeing and its workforce to support their companies. Hundreds of thousands of jobs in Washington are indirectly related to Boeing and are affected. I’ve been very critical not only about how our state has treated Boeing, but all employers in Washington. Even when the Legislature made concessions to Boeing in 2003 to secure the Dreamliner in our state, I also said we should extend those tax relief benefits to all businesses. Unfortunately, very little has been done in the Legislature to make Washington attractive for business.

Today’s announcement needs to be a wake-up call to our political leaders in Washington to create a more competitive business climate before we lose more employers to other states.

(Click through to the article for another view)

Eventually, maybe the American people will realize that they can’t attack “big corporations” without facing the consequences. Until then, Democrats will keep raising taxes and adding regulations that causes business to shift jobs to low-tax states, and eventually, overseas. Outsourcing is caused by Democrats who are hostile to businesses. Unemployment is caused by Democrats who are hostile to businesses.