Conservatives tend to say that taxing corporations higher than the employee is a war against success. I disagree and so does the father of capitalism, Adam Smith. The entire purpose of allowing the corporation to keep more of their money is, that extra capital will enable them to pay higher wages,expand their factories or stores and possibly buy new equipment. It was never meant for personal consumption of the CEO and board of directors, but this is what we see today. This is why we have the largest gap in wealth since the 1920s.
Now, this is why I believe the government should have a role in protecting the economic interests of the people.
If a corporation isn’t willing to allow the extra money from the tax breaks to go toward higher wages or business expansion as it was planned to. “We the People” should tax them higher in order to decrease the taxes on the working families and small mom and pop businesses.
The government can also use the money to create tax credits for higher education, housing and property tax relief for the elderly and working families.
The tax breaks for working families and small businesses would have a direct positive impact on our economy. Studies have shown that the rich end up saving their personal tax breaks which has zero impact on our economy and working families spend most of their extra cash.
We need a government that looks out for the people. The role of our Government is to ensure everyone who works hard, whether you are digging a hole,driving a truck or own a family shoe repair shop that we all get a fair share of the economic pie. Let’s make the government and the economy work for, “We the People.”
Only maintaining existing rates.
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p>So the scenario would be – “If a business is selling 100 tires a day and they pay 30% in taxes this year. Now next year they pay 45% in taxes but still are only selling 100 tires a day, HOW CAN any businessman hire more people? They are selling the same amount of tires.”
Better question, WHY WOULD THEY HIRE if they didn’t increase sales
Are people throwing tires on the floor and stalking out in disgust when it takes too long to ring them up? Are harried salespeople supplying inadequate info to put across the sale?
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p>Hiring more to increase sales is a form of investment – but you need to be able to AFFORD that investment. More taxes at a time of flat sales guarantees no hires; a stable cost of doing business encourages attempts at expansion.
That makes absolutely no sense. Corporations aren’t going to hire more unless there is already a trend in increased sales. Besides, they already have the tax cut in place and are not hiring. In fact, they are cutting jobs in order to keep shareholders happy and the dividends rolling in.
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p>I can’t believe you are still fighting for trickle down. How many times do you have to be kicked before you decide to travel down a different path? Honestly, you can believe it if you want but stop dragging the rest of us with you.
hire marketing people and salespeople to increase the sales. Businesses often hire more people to increase sales. It happens every day.
and probably never will.
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p>Your theory is just not working.
Live – you discuss this only in terms of shareholders and corporations. EaBo and I are talking in terms of retail business (as I think Ray M was too, as few corporations are selling tires in the lobby). And at the Main St. business level, really, there ARE hires to improve sales.
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p>So now you claim that companies hire sales people in order to increase sales. Let’s just play that out.
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p>So ReallyGoodTires faces a 15% tax increase. How to pay it? Well, it needs to increase sales. Right?
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p>Increased taxes are no different from any other embedded cost; when costs go up, a business needs to either raise their price or raise their volume.
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p>So, if your argument is true, then increasing taxes will cause businesses to hire more sales people.
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p>Look, taxes do not connect to hiring. They just don’t. No matter how relentlessly right wingers claim the opposite, tax rates to do not drive hiring rates. Not up, not down.
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p>”Trickle-down” didn’t work during the Gilded Era, it didn’t work during the Bush Bubble, and it won’t work now.
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p>The primary thing tax cuts accomplish for business owners is that they put more money in their wallets. That’s all. That’s why business owners clamor for tax cuts. All this twaddle about “growing the economy” and “creating jobs” is horse manure — tax cuts benefit the taxpayer who receives them. Period.
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p>NO business expands staff, opens new stores, or expands their hours based on tax changes. NONE.
Political parties are more interested in selling the snake oil than in accomplishing a cure
A business that can’t figure out a sales tax on a purchase?
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p>Puh-leeze! No business exists that is that stupid. Even the guy who owned Toscanini’s & Some Day Cafe (who made some obvious business errors like forgetting to renew his lease) could ring up sales quick enough.
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p>BTW, Toscanini’s ice cream is delicious…
It was paying the state those funds that he apparently couldn’t figure out.
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p>I absolutely agree with you that the premise is absurd.
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p>It is no harder to figure out tax forms than to figure out what investment to buy. Business owners don’t seem to have any problem with the latter — they can surely do the former.
I wonder if you shop, let alone work, retail.
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p>Example – when I was a store manager, there would be people at the cash register, a clerk would be ringing up sales, customers would ask about a sales price, or coupon, or there would be a mismatch between a scan and a sticker and it had to be checked, and so on.
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p>And another customer 3 places back would place their red plastic basket on the floor and walk out, because there was no third key to open another register.
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p>You are obsessed with corporations, and shareholder takeovers, and sales tax rates. I’m talking about actually WROKING IN A STORE where you need more people to keep customers happy, but you veer off into abstruse ideology. This has nothing to do with trickle-down, you nitwits!
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p>You just shop online and let UPS deliver, don’t you? All the while piously canting that there need to be more jobs at fair wages…
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p>(BTW – a ‘third key’ is a person, not an actual key, so don’t tell me there should be more keys cus…)
but instead they are trying to reduce costs and increase productivity so they can increase profits, when those profits are already satisfactory at worst, obscene at best. Trust me, I’ve stood in plenty of lines at quite profitable mega retailers rather furious that they did not have more lines open. They would prefer to keep the money for themselves or distribute it to shareholders.
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p>It has everything to do with trickle down.
If I latched on to your rationale I would be nitwit. I think we can safely say that your line of thinking is reserved strictly for nitwits.
I’ve worked retail that required the collection of sales tax, pretty straightforward. Just focus on what you’re doing one customer at a time.
as an investment in the economy, infrastructure, safety, education of future workers, health, fire, security, transportation, clean air and water…..
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p>An investment that will actually increase long term sales and opportunity.
“If a business is selling 100 tires a day and they pay 30% in taxes this year. Now next year they pay 15% in taxes but still are only selling 100 tires a day, why would any businessman hire more people? They are selling the same amount of tires.”
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p>Business has 15% more $$. It could use the money to:
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p>-Advertise and sell more tires.
-Invest in some innovation that may increase demand for his product. And he’d sell more tires.
-Save the money and invest in another tire shop in another market. And he’d sell more tires.
-Put the savings into his current building to save energy or overhead in which case he’d save even more to advertise, innovate, invest. And he’d sell more tires.
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p>Or, he could willingly give the money to the government and hope it would use the money well.
I’m not sure why we are talking about a 15% tax rate on corporate income. Although perhaps their effective tax rate is that much. After all, Warren Buffett tells us he pays just 17.7% on his income.
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p>Tires are a bad analogy anyway. Not to many people are out buying tires because they want more awesome ones. They buy tires because they need them, and probably in today’s economy are waiting far longer than they should. Maybe putting a little more money in in the pockets of all of those middle class commuters out there might compel them buy more and better tires. Putting more money into millionare’s pockets isn’t going to do it. The road your on is leading us to the same place we are, sort of a rotary with no exits. Can we get off the rotary and start getting somewhere please.
he could put it into his bank account, or stock portfolio, or spend it on more lavish gifts for his wife and kids, or a new boat, or whatevs.
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p>There are a lot of things he could do that don’t do much for the guys who work at the tire store.
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p>I wouldn’t claim that there’s no stimulative effect to lowering investment taxes. There is. But dollar-for-dollar, it’s not an efficient way to create jobs for people that need them. You want jobs on the ground floor of the economy, put money on the ground floor of the economy. Big business could do that (Henry Ford did, once upon a time), but currently isn’t.
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p>So gov’t can pick up the slack. Yes, you hope it would use the money well. That’s why you vote.
then I’d believe it! But state gov’ts don’t hoard it; they
use it to pay teachers, cops, librarians; pave roads; provide Medicaid; administer food stamps (which are surprisingly very stimulative!); etc.
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p>(How can our state be spending like a drunken sailor on one hand, but be hoarding $ on the other?)
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p>Look PP, I’m not doctrinaire about this. If cutting taxes for the wealthy really did make everyone richer, I’d like to think I’d be for it. Prove it to me.
Much of what I would have shown you was on the old MA GOV web site, and that has been swept clear of old embarassments. I only ask you to believe that I am not a liar.
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p>Here’s a quote from July of 2009 about ARRA money I want you to think bout:
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p>Here is a link to a news story it was taken from. All it demonstrates is the attitude that we could stockpile the money for future use in years to come. Which is what was done.
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p>What I can no longer find is Aloisi’s explanation on the old MHD page explaining that we WOULDN’T be be spending the money now, but would keep it to ‘create even more jobs in the future’.
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p>The PURPOSE of the stimulus money was to STIMULATE. NOW. To get the money into the economy, not the bank balance. We really DID hoard the money, and much is still unspent. Did other states do the same?
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p>Obama regrets not getting the stimulus into the hands of business, but leaving it to the states. This payroll holiday is an approach that will have greater immidiate benefit, instead of stockpiling cash for ‘someday’ projects like the train to New Bedford.
If they spend it right away and make (more) mistakes because they rush, the GOP blames government. If they act more carefully, trying to get the most public bang out for the buck, the GOP blames government.
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p>The reality is that new infrastructure projects now-a-days take a long time. The engineering is more complex, the environmental impacts more complex, the sensitivity to residents and businesses nearby heightened, etc etc. It takes time, even in a rushed schedule.
For the megaprojects, I agree. But for immediate work like bridge repair, drain cleaning, tree trimming, etc. eligible for subcontracting – or projects already vetted and on the TIP list – there were no such holdups. But MA didn’t spend the money that way. THEY HOARDED IT. TO USE THE FLOAT. It was free money, why should we squander it on letting people who aren’t on the state payroll get work?
First off, I think that taxes can have a significant impact on how our economy works — but maybe not in a way that is “conventional wisdom”.
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p>Conventional wisdom says “higher taxes are bad, lower taxes are good”. I think that’s very oversimplified.
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p>I think that taxes can result in higher investments, but I don’t think we’re seeing that happening right now precisely because the taxes are relatively low. Keep in mind that even in 1986, the top tax bracket was 50% — compared to today’s 34%.
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p>We have been talking about increasing taxes on income over $250,000. If a tire shop owner is taking $250,000 — a pretty good income — in profits from his business, there’s little indication that he’s going to use any additional money to further “invest” in his business. Remember, many “investments” are tax-deductible because they are expenses.
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p>I think that the tire store owner is more likely to “invest” in his business if the taxes are higher on the upper tranches of his profits. If the tax rate was 50% over $250,000, for example, then it seems there are just four likely paths that the owner will take:
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p>1) A passionate owner won’t care about the upper revenue being paid at a high rate to the government, he will continue to expand his business and will just pay the taxes. This happened in this country even when the top tax bracket was 91%. Would Mark Zuckerberg not have developed Facebook if the top bracket was 91% over $5 million? Of course he would have still done it.
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p>2) Other owners won’t seek to expand their businesses to become mega-sized because they aren’t as passionate and driven — so they will earn their $250k and will stop there. That leaves demand unmet, meaning that more tire shops can exist (instead of a mega-chain). Maybe that’s inefficient, but inefficiency is what employs people.
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p>3) Some owners will not want to pay 50% to the government, they will realize that they can get a better return by hiring some marketing people, more clerks, etc. They will try and steal share from #1 above. Hiring and investment is good for the economy.
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p>4) Some owners will try and cheat the government. There are always some criminals in the mix.
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p>See, we have made this all about the money, but money doesn’t dictate everything. People don’t start tire shops purely because of the money. They start them because they want to start a tire shop, because they have some knowledge and interest there. How many tire shop owners say “hey, the government effectively won’t let me earn more than $250,000 in profits so screw this, I’m just going on welfare!”? It just doesn’t happen. The people capable of earning that amount of money will still do it. Maybe not the same way, but they’re not going to check out of the economy. And even if they do, that just opens up the playing field for someone else.
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p>Business is driven by both demand and capital [supply]. You need both. But if you had to pick just one, it makes more sense to have demand than capital, because rarely does capital create demand. Try opening a store in a rural area with a population of 300 people. You can be well-capitalized, but without the demand, you’re going to fail.
for the Bently and their entire consumer base is made up of the top wealthiest 2% this tax plan is excellent.
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p>But for all those who are unemployed, under employed, taking pay cuts or just continuing to struggle, they may be putting off their tire purchase to another year.