QOTE

Filed in National by on February 8, 2009

How does cutting taxes create jobs?

and

Where are all the jobs from bush’s tax cuts in 2001?

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  1. pandora says:
    February 8, 2009 at 8:23 pm

    Tax cuts only work when people spend the money. And that’s the problem. In this economy who in their right mind is going to go shopping.

  2. anon says:
    February 8, 2009 at 8:25 pm

    Also, where is all the stimulus from Bush’s 3Xcheck’s in the mail tax ‘rebate?

  3. John Feroce says:
    February 8, 2009 at 8:39 pm

    “How does cutting taxes create jobs?”

    Until they come out with something on Nickelodeon that you can understand, you’ll have settle for President Obama’s detailed plan – “Obama Eyes $300 Billion Tax Cut”

    “As for the business tax package, a key provision would allow companies to write off huge losses incurred last year, as well as any losses from 2009, to retroactively reduce tax bills dating back five years. Obama aides note that businesses would have been able to claim most of the tax write-offs on future tax returns, and the proposal simply accelerates those write-offs to make them available in the current tax season, when a lack of available credit is leaving many companies short of cash.

    A second provision would entice firms to plow that money back into new investment. The write-offs would be retroactive to expenditures made as of Jan. 1, 2009, to ensure that companies don’t sit on their money until after Congress passes the measure.

    Another element would offer a one-year tax credit for companies that make new hires or forgo layoffs, which could be worth $40 billion to $50 billion. And the Obama plan also would allow small businesses to write off a broad range expenditures worth up to $250,000 in 2009 and 2010. Currently, the limit is $175,000.

    William Gale, a tax-policy analyst at the Brookings Institution think tank in Washington, said the scale of the whole package is larger than expected. He called the business offerings a true surprise, since most attention has been focused on the spending side of the equation, especially the hundreds of billions of dollars being discussed for infrastructure and aid to state and local governments.”

  4. cassandra_m says:
    February 8, 2009 at 8:49 pm

    And none of that — of course — explains how a tax cut creates a job.

    Especially when employers are letting go employees, because — you know — people and businesses are cutting back on expenses. There are no businesses who are going to say YIPPEE! I have a tax cut! Let me go hire some people!

    Jeez.

  5. John Feroce says:
    February 8, 2009 at 9:02 pm

    An employer need “Cash” in order to hire people. Do you really need any more of an explanation?

  6. John Feroce says:
    February 8, 2009 at 9:04 pm

    and of course it wouldn’t be an explanation to people who have never created jobs!

    Jeez right back at you

  7. jason330 says:
    February 8, 2009 at 9:05 pm

    DV,

    It isn’t the tax cut per se. It is the magical unicorn that brings the tax cuts that creates the jobs.

    The tax cuts are only intended to enrich a few influential people. If those people then pay for a few more domestic servants that is just a bonus.

  8. jason330 says:
    February 8, 2009 at 9:06 pm

    Giovani,

    We get it. The earth is stationary. The sun moves around it.

    (The guy has been in a coma for 8 years I guess.)

  9. Brian Shields says:
    February 8, 2009 at 9:07 pm

    Where are all the jobs from bush’s tax cuts in 2001?

    Getting bonuses reaped from TARP funds?

  10. cassandra_m says:
    February 8, 2009 at 9:19 pm

    Hey, Giovanni:

    I employ people.

    I hire new people when I need their services and I think I can keep them working and I think I can cover their costs.

    I’m not hiring people because I have extra cash.

    In my business, extra cash is called Profit.

  11. John Feroce says:
    February 8, 2009 at 9:20 pm

    “If those people then pay for a few more domestic servants that is just a bonus.”

    Like who? the last 5 Democratic nominees for administration jobs. I don’t think any of them created jobs either, they didn’t have time to do that and suck on the public tit at the same time. Sort of like walking and chewing gum. How’s Tom ‘Limo” Daschle doing?

  12. jason330 says:
    February 8, 2009 at 9:22 pm

    More non-reponse to the question. You want to know why there is no response DV?

    Because “tax cuts work” is an article of faith. There is no substance to it. Giovani has taken a leap of faith and that is that.

    Poor chap.

  13. John Feroce says:
    February 8, 2009 at 9:26 pm

    “In my business, extra cash is called Profit.”

    OMG she gets it. If you pay less in taxes, you have money left over.

    You somehow find a way to segregate the tax cuts resulting in money the business keeps into some category you don’t call profit. I’d love to know the name of your accountant, he has some other category for $$$ that ends up in the black column? What is it called?

    Assuming he is not an alien and puts all money the business has after expenses into the profit column, you then have money to expand your business….thus creating JOBS!

  14. John Feroce says:
    February 8, 2009 at 9:29 pm

    Jason

    Obama official – “”We’re working with Congress to develop a tax-cut package based on a simple principle: What will have the biggest and most immediate impact on creating private-sector jobs and strengthening the middle class?” said transition-team spokeswoman Stephanie Cutter. “We’re guided by what works, not by any ideology or special interests.”

    She gets it as does the president. Just say we’re doing the back and forth for sport, otherwise I’m going to think you all are seriously uneducated. Obama is the one pushing the cuts! It is clear to all the benefit.

  15. cassandra_m says:
    February 8, 2009 at 9:37 pm

    Taxes I have to pay are part of the cost of doing business and built into the overhead charged to clients.

    Interestingly, I also build in profits too, so I get both of them covered. So at the end of the day — taxes get paid because we recover those costs in full AND I get my profit numbers.

    NOW — the way tax cuts work in this scenario (Why is it unusual to have your taxes covered in overhead?) — is that you pay less taxes, but you don’t really change your overhead. You’ve just enhanced your profit. You aren’t really going to buy anything new with that or hire anybody.

    Because you’ll get those costs covered with your overhead and the new work you’ll have that person doing.

  16. John Feroce says:
    February 8, 2009 at 9:49 pm

    I give up, you’re right, President Obama is being stupid and shouldn’t do any of it. It’s all a sham. He’s lying when he says tax cuts are going to create jobs.

    Jason please let me know where to go to protest.

  17. X Stryker says:
    February 8, 2009 at 10:02 pm

    You hire people to enhance your revenue, which is what you do when you sense there is rising or potential demand. (Yes, there are some cases where you hire people for cost-cutting positions, but these represent far fewer jobs than revenue enhancement hiring). Tax rebates to *individuals* in *large numbers* (not to the wealthy 1%) can help spur demand, certainly, but they can’t sustain it. When you have a crisis in which consumer cash supply is short (read: unemployment and high debt), you have to make a long term commitment to driving demand (read: government hiring).

    Here is why spending is worth more than tax cuts: you can’t pay taxes on money you don’t have.

  18. Von Cracker says:
    February 8, 2009 at 10:07 pm

    Tax cuts do not create jobs directly, and the result is certainly minimal in the short-term. Gov’t spending has been proven to work. Better so in a deficit.

    John’s argument relies on the benevolence from these recipients of tax cuts. As Cass wrote, “it’s profit”. John’s is a “sales pitch” argument at best. Not necessarily untrue, but definitely not looking at the situation’s best interests.

  19. cassandra_m says:
    February 8, 2009 at 10:30 pm

    He’s lying when he says tax cuts are going to create jobs.

    He likely is — this is the bipartisanhip part he was working at. Some tax cuts for you (even if they are much effective as stimulus) and direct stimulus for the rest of us.

    And don’t think that we haven’t noticed that you’ve not shown how tax cuts create jobs.

  20. Not Brian says:
    February 8, 2009 at 11:56 pm

    Tax cuts on businesses make a business more profitable. Investment has a supply and demand dynamic – when you increase the potential return you increase the number of dollars that will be invested. I could go on about risk adjusted return and how tax cuts could bring money that is sitting on the sidelines out into the economy and blah, blah blah…

    Appropriately planned tax cuts can be used to create investment and jobs. I read on this blog all the time where people decry our dependence on foreign oil and we need to create investment in alternative energy. How do you think that is done? Are we going to set up a state owned alternative energy firm? No, it would be via tax policy. That tax policy would benefit firms that want to start-up or want to expand in an industry receiving the cut.

    The economic question really should not be whether business tax cuts create (or save) jobs, because it is a blatantly stupid argument that has zero basis in reality to say they don’t.

    I think the question should be whether or not a particular cut is the best way to save jobs right now, and whether the tax cuts are going to new investment or (in the case of the retroactive write down proposal) the to save the companies that are swirling around the drain. The banks get a HUGE benefit from this – healthy companies get nothing from it, which does not make a lot of economic sense.

    What stimulus investment might have a bigger impact?

    Robert Reich lays it out here…

    Robert Reich outlines the relative value of tax and stimulative options in his blog…

    The reason why tax cuts under Bush in ’01 were bullshit was because we lowered taxes on individuals making a large amount of money. These people have will spend and recirculate the least amount of money back into the economy (they have what is called a low ‘marginal propensity to consume’). They have the money they need to spend, if you give them $10,000 today, they are not going to run out and buy something with it. The less cash you have the more likely you are to use a larger portion of it for consumption. It was a gift to the wealthy.

    Problem today is that even doing this with people with low incomes they will put a lot into retiring debt, which is not stimulative.

    The one big advantage to direct stimulus is you know where the money is going. The downside is that the project may not be the best use of the money. The problem with tax cuts is they are bought and paid for by lobbyists and end up being more of a gift than stimulus (like the windfall the banks are going to get from this retroactive cut and how little it will help them in the long term).

    And boy, all this completely avoids the trillon dollar question of how much this is really going to cost us… 20% inflation in 3 or 4 years?

  21. Steve Newton says:
    February 9, 2009 at 12:25 am

    not brian
    the link to Reich doesn’t work; can you send it again?

  22. Not Brian says:
    February 9, 2009 at 12:33 am

    Very sorry…

    http://robertreich.blogspot.com/2009/02/senate-republicans-and-stimulus-playing.html

  23. Steve Newton says:
    February 9, 2009 at 12:36 am

    thanks

  24. anon says:
    February 9, 2009 at 6:42 am

    A tax cut, to the GOP, is justified by trickle down and we know how that worked out for us.

  25. Mike M. says:
    February 9, 2009 at 6:52 am

    The average CEO makes almost 25x what the average worker makes – how many jobs could even half of that difference create? A tax cut for the wealthy or for business simply goes into the pocket of those in charge. A company will only expand if it is a sure thing those in charge will make more money. In the current economy, that is not the case. Instead, the rich get richer and the poor get poorer with the upper class tax cuts. Greed drives capitalism and makes it work, but we must follow that to its logical conclusion.

  26. pandora says:
    February 9, 2009 at 7:03 am

    I don’t hate tax cuts. What I can’t stand is how tax cuts are the only solution Republicans have.

    Banks fail = tax cuts
    Economy in crisis = tax cuts
    People losing their homes = tax cuts
    People losing their jobs = tax cuts
    People losing health insurance = tax cuts

    And on and on it goes.

  27. Unstable Isotope says:
    February 9, 2009 at 8:18 am

    Tax cuts are at best an indirect job creator. That’s why they are much less effective at stimulus. Stimulus works best when it is put into the hands that will spend it directly, which is why food stamp aid is the most effective stimulus. Tax cuts aren’t stimulative at all when people save them and use them to pay down debt.

  28. Unstable Isotope says:
    February 9, 2009 at 8:20 am

    Pandora,

    It’s all they’ve got. I’m a bit put out by the dishonest debate about the stimulus plan. There are still Republicans all over TV talking about its cost, but they had no problem with the $3T Iraq War or the $1.35T Bush tax cuts.

  29. jason330 says:
    February 9, 2009 at 8:42 am

    This sentence:

    Appropriately planned tax cuts can be used to create investment and jobs.

    Is the thin edge of the wedge for the radical Modern Republicans and their nihilistic “grab everything you can” anti-American mindset.

    I’m at the point of thinking that modern Republican economic theory is a disease that needs to be eradicated.

  30. Donhusseinsquishviti says:
    February 9, 2009 at 8:44 am

    should we round them up and shoot em? seems to me someone had it right that one time

  31. jason330 says:
    February 9, 2009 at 8:48 am

    Indivduals simply need to be kept away from the levers of government.

    It is the theory that needs eradicating.

  32. Von Cracker says:
    February 9, 2009 at 9:55 am

    Is Libertarianism the true Utopist fantasy?

    And yes, it’s meant as a pejorative…like how the right has tried to portray Liberalism.

  33. Unstable Isotope says:
    February 9, 2009 at 10:10 am

    From the way I see it, modern libertarianism seems a lot like “I want what’s mine.” I guess I feel that libertarians value cutting their own personal taxes more than preserving their personal freedom by teaming up with the Republican party. In fact, they’ve let the Republican party co-opt their rhetoric.

  34. Unstable Isotope says:
    February 9, 2009 at 10:11 am

    Hmmm…

    I think I may get in trouble with some of the regulars for the comment above.

  35. Von Cracker says:
    February 9, 2009 at 10:19 am

    heh – you most likely will!

  36. cassandra m says:
    February 9, 2009 at 10:24 am

    I wouldn’t worry about it, UI. You are in trouble with them already — you’ve just given them a reason to concoct an entire strawman with which they’ll now lecture you on your persistent wrong thinking. It’s more amusing than anything else.

  37. pandora says:
    February 9, 2009 at 10:40 am

    Well, let’s all get in trouble. I don’t see how Libertarianism works as a governing model. It seems more like a philosophy – nice in theory, but impractical in real world application.

  38. Von Cracker says:
    February 9, 2009 at 10:48 am

    We can all live in our own Private Idaho!

    Independently pulling bootstraps and such…LOL!

  39. Donhusseinsquishviti says:
    February 9, 2009 at 12:16 pm

    I got something you can pull individually

  40. Von Cracker says:
    February 9, 2009 at 12:40 pm

    A Phelps device?

    sure…I’ll be over tonight!

    😉

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