R i g h t a r d i a: The Tax Cut ruse

Monday, June 20, 2011

The Tax Cut ruse

Tax cuts never have created jobs, they never will.

You don't even have to be a rocket scientist to figure this one out.

You rarely hear of someone claiming that after this or that tax strategy their business really took off.

No, you'll hear business owners talk about advertising, or a new marketing technique, or a new product, or new manufacturing process, or maybe even their own brilliance or something, but you'll rarely find someone in business crediting their success to this or that tax cut.

That doesn't mean business owners won't cry for tax reductions, and that doesn't mean they won't try to claim that tax reductions result in more jobs.

But when you get down to brass tacks, few, if any, business types will try to claim that a few percentage points in tax rates have much to do with the success or failure of their business, and those who do, weren't really all that good at business anyway.

The engine that drives any business is its customers. Period. No customers, no business.

If customers can't buy your goods or services, your business will never succeed, even if you cut the tax rate to zero.

If a "welfare" recipient has more disposable income because of a government allotment, that money often ends up at their local 7-11 or something, helping its bottom line.

If "beer and ciggie" sales decline because of a cut-off of government funding (like food stamps), the local 7-11 sure isn't going to hire another clerk, in fact if sales are hurt enough nationally, the whole chain may go out of business.

That sure doesn't increase jobs. Furthermore, the ripple effect of the chain closing may indeed hurt the Slurpee machine manufacturer, the company that supplies paint for the convenience store parking lots, and it may even force building contractors out of business because they have to compete with the inventory of vacant convenience stores.

Hey, but tax rates are lower. I never, ever based my hiring or firing decisions on my tax rate, rather it was based simply on whether customer demand was there. I'd piss and moan about taxes constantly, no matter who was in office, but I never blamed my business success or failure on tax rates.

Show me a person who makes enough to worry about tax rates and I'll show you a person who has the wherewithal to legally avoid (not illegally evade) much of their tax "burden."

Rightardia posted another article on this topic that suggested that Rick Scott's cuts to the Florida corporate income tax rate is irrelevant. Only 5,000 Florida businesses pay corporate taxes and they are the large C-corporations.

Since Florida S-corporations pass their tax liabilities to the owners and share holders, these corporations pay no Florida corporate tax.

Moody's Analytic's also discovered that tax cuts are one of the least successful ways to stimulate the economy. Mark Zandi researched this table and he was a consultant in the 2008 John McCain campaign.

source:

From: Galen Hekhuis 
Newsgroups: talk.politics.misc,alt.politics,alt.politics.liberalism,alt.politics.obama,alt.society.liberalism,alt.politics.usa
Subject: Tax  cuts do not create jobs
Date: Mon, 20 Jun 2011 11:36:41 -0400