From 2 years ago: "The more money the wealthiest have, the more job-producing investments"

[KansDem]

DU Thread

I thought considering the attention given to "bailing out" banks and investment firms, the recession and job losses, this thread from exactly two years ago should be revisited:

From Bush_Eats_ Beef, April 5, 2006--

Welcome to this morning's trickle-down propaganda.

Big Gain for Rich Seen in Tax Cuts for Investments

By DAVID CAY JOHNSTON
Published: April 5, 2006

http://www.nytimes.com/2006/04/05/business/05tax.html

The first data to document the effect of President Bush's tax cuts for investment income show that they have significantly lowered the tax burden on the richest Americans, reducing taxes on incomes of more than $10 million by an average of about $500,000. An analysis of Internal Revenue Service data by The New York Times found that the benefit of the lower taxes on investments was far more concentrated on the very wealthiest Americans than the benefits of Mr. Bush's two previous tax cuts: on wages and other noninvestment income.

---SNIP---

The Times showed the new numbers to people on various sides of the debate over tax cuts. Stephen J. Entin, president of the Institute for Research on the Economics of Taxation, a Washington organization, and other supporters of the cuts said they did not go far enough because the more money the wealthiest had to invest, the more would go to investments that produce jobs. For investment income, Mr. Entin said, "the proper tax rate would be zero."

:spray:

Opponents say the cuts are too generous to those who already have plenty. Representative Charles B. Rangel of New York, the senior Democrat on the House Ways and Means Committee, said after seeing the new figures that "these tax cuts are beyond irresponsible" when "we're in a war; we haven't fixed Social Security or Medicare; we've got record deficits."

Because of the tax cuts, even the merely rich, making hundreds of thousands of dollars a year, are falling behind the very wealthiest, particularly because another provision, the alternative minimum tax, now costs many of them thousands and even tens of thousands of dollars a year in lost deductions.

[damntexdem]

1. Now finish the true version:

"The more money the wealthiest have, the more job-producing investments ... THEY NEED NOT BOTHER TO MAKE."

[Juche]

2. Ah

Under Bill Clinton the income tax rate was 39.6%, the capital gains tax rate was 20-28%, and the dividend tax was higher. 22 million jobs were created under his tenure. It doesn't prove a strong connection between the two (investment taxes & job creation). But if this myth of low taxes on investment income = jobs then we would've had no job creation before george Bush or Ronald Reagan. Taxes on corporations & the wealthy were very high before Reagan.

http://en.wikipedia.org/wiki/Domestic_policy_of_the_George_W._Bush_administration#Employment

I think from Dec 2000-July 2005 the Bush admin created 200,000 net jobs.

"During Bush's presidency, the U.S. population has risen by about three million people per year. Private employment (seasonally adjusted) originally decreased under Bush from 111,680,000 in December 2000 to 108,250,000 in mid-2003. The percentage drop in jobs was the largest since 1981-1983. The economy then added private jobs for 25 consecutive months from (July 2003 to August 2005), and the private employment seasonally adjusted numbers increased as of June 2005 when it reached 111,828,000."


No idea what about July 2005-March 2008. But we've lost over 200k this year so far. So I doubt the net job growth has been more than 2-3 million in his 7 years.

Bush has cut taxes for the rich, we have 2-3 million net jobs. Clinton raised taxes on the wealthy, we had 22 million jobs. Doesn't prove anything, but it does really tend to show what BS the idea of cutting taxes on the rich as a vehicle for job creation is.

you can easily create jobs by investing in infrastructure too. If we build renewable energy, universal broadband, universal pre-school, high speed rails we would create millions of jobs.

OBama & Clinton want to spend $21 billion a year for 10 years to create 7 million jobs in alt. energy & infrastructure.

[Hannah Bell]

3. No one invests in things if there's no profit.

If the working class's disposable income drops, they have less to spend on new goods - so why invest there? Low profits.

Therefore, if you lower the income of the working class to raise the income of the "investing" class, what you get is non-poductive speculation.

As in - derivAtives of derivatives of mortgages; wheat futures options, Florida swampland, tulips.

[bbgrunt]

5. you've got it!! Welcome to DU. Great avatar.

[Warpy]

4. Mr. Entlin, you are a complete idiot.

The rest of us realize that no rich man ever gave anybody a job unless he had a bunch of poor men with money in their pockets ready to buy the goods or services it would produce.

It's time for these supply siders to be banished to the lunatic fringe where they've always belonged.

Let's hear some demand side economics for a change.

[StClone]

6. Explaining our confusing economic mess

Excellent overview in simple terms...nore than worth a listen -- a must!

Around 30 minutes worth.

http://www.npr.org/templates/story/story.php?storyId=89338743

[girl gone mad]

7. And we are all being taxed now to pay for those breaks..

in the form of inflation, which disproportionately hurts those with a low income.

This was a predictable and predicted outcome.

[aint_no_life_nowhere]

8. Always with this trickle down stuff

We never hear these guys talk about trickle up economics. If you put money into the hands of the common people, they spend it on concrete things they need in this country and that produces jobs and expands industry. Some wealthy people might put their extra money at work taking risks by starting new businesses or providing capital for companies to expand research and development efforts to create better and new products. But a lot of the wealthy don't risk their money this way and, even if they do, they don't even invest it in this country.