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Forgive my simple view but how about they increase taxes for the top earners but then give breaks to entrepreneurs who are actually doing things to help grow the economy and growing their businesses?

That would kick start people who are sitting on the fence.

The cause of so many countries’ economies stagnating is all the uncertainty IMO. The people in charge need to state clearly and concisely what they are doing rather that saying what they may or may not do.

obsidianaura wrote:Forgive my simple view but how about they increase taxes for the top earners but then give breaks to entrepreneurs who are actually doing things to help grow the economy and growing their businesses?

That would kick start people who are sitting on the fence.

The cause of so many countries’ economies stagnating is all the uncertainty IMO. The people in charge need to state clearly and concisely what they are doing rather that saying what they may or may not do.

How do you do that?

Well there's several ways to do it really. Back when the US was in its last recession they had big national projects building roads and lots of civic engineering which involved employing lots of people, cheap cars were produced and lots of businesses sprung up around it the result was they impressively pulled themselves out of recession.

I’m not sure what kind of national projects you can do now it, seems that green energy production seems to be what’s needed now so maybe producing geothermal generators which would involve lots of industry and new infrastructure, produce new jobs and would again lead to new types transport and new ways of thinking. The problem is everyone seems to be running up big budget deficits and debts these days not Canada though, from what I hear so well done there!

I think the way round is to get companies to invest in them. That’s how London’s paying for the Olympics. Lots of companies want to be seen to be green and perhaps tax breaks on such projects would be the way to get them moving?

The thing to keep in mind is that there is a big difference between short-term job growth and log-term job growth.

Short-term job growth is relatively easy to do. You simply pour money into the lower income brackets. They, in turn, spend that money almost immediately on things like appliances, or car repairs, or other basic needs. Once they do that, they spend money on simple luxury items, like televisions, restaurants, going to the movies, or upgrading their homes. All of these create immediate jobs in manufacturing, service, and retail. However, all you end up doing is shuffling money around, not really creating long-term growth. It alleviates immediate suffering and hardships, but does very little for the economy as a whole.

Long-term job growth is more difficult. To achieve this, you need people (or corporations) who aren't spending their money. They, of course, aren't just sitting on large piles of cash. They take that spare money and invest it in stocks or bonds, or even just in savings accounts. These, in turn, wind up in venture capital firms, in mortgages, and in funding new business growth. They, hopefully, result in new technologies, increasing real estate value, and ultimately leading to entire new job markets opening up. This makes the economy as a whole much stronger. It does little to nothing to help out the current poverty and unemployment problems, but it does lead to a more permanent fix in the end.

So, that's the debate the 2 political parties need to have. Do we:
A) Raise taxes on the wealthy and cut them for the middle and lower class, resulting in dropping the unemployment rate but weakening the economy in the long run, or
B) Keep the current low taxes on everyone, resulting in high current unemployment, but strengthening the economy over the coming decades.

Grakmar wrote:So, that's the debate the 2 political parties need to have. Do we:
A) Raise taxes on the wealthy and cut them for the middle and lower class, resulting in dropping the unemployment rate but weakening the economy in the long run, or
B) Keep the current low taxes on everyone, resulting in high current unemployment, but strengthening the economy over the coming decades.

Or C, keep the current low taxes on everyone, and keeping the economy weak because investors aren't investing much of their money in the first place so A doesn't apply to the real world.

A tax break to small businesses and simplifying tax, loans, and startup for new businesses would be far more beneficial than a tax break intended for huge multinational businesses that don't actually pay much in taxes anyway because of their multinational nature allowing them to get out of paying it through offshore accounts.

Course, we won't see this, because Republicans don't give a rat's ass about small business and Democrats are too incompetent to notice.

Melissia wrote:Or C, keep the current low taxes on everyone, and keeping the economy weak because investors aren't investing much of their money in the first place so A doesn't apply to the real world.

Investors are still investing their money. No one is just sitting on huge piles of cash like Scrooge McDuck.

A lot of them are investing money in shorting bank shares, or commodities, or dodgy Greek government bonds. None of those help build infrastructure for the long term, or generate a useful short term boost.

I don't know to what extent we can blame the rich alone. Most of us have pension funds. It is often the pension funds doing the investing.

Grakmar wrote:

Melissia wrote:Or C, keep the current low taxes on everyone, and keeping the economy weak because investors aren't investing much of their money in the first place so A doesn't apply to the real world.

Investors are still investing their money. No one is just sitting on huge piles of cash like Scrooge McDuck.

(source from my first link)
Currently, the top corporations are collectively essentially sitting on about 2 trillion dollars of money. Their investments are extremely cautious at their very best (when they are happening), as because of these cash reserves they feel they can just wait out and weather the storm.

Trying to get a loan (for expansions, to obtain new equipment, to hire new workers, etc) as a small business right now is extremely hard precisely BECAUSE of this.

Melissia wrote:

Grakmar wrote:

Melissia wrote:Or C, keep the current low taxes on everyone, and keeping the economy weak because investors aren't investing much of their money in the first place so A doesn't apply to the real world.

Investors are still investing their money. No one is just sitting on huge piles of cash like Scrooge McDuck.

(source from my first link)
Currently, the top corporations are collectively essentially sitting on about 2 trillion dollars of money. Their investments are extremely cautious at their very best (when they are happening), as because of these cash reserves they feel they can just wait out and weather the storm.

Trying to get a loan (for expansions, to obtain new equipment, to hire new workers, etc) as a small business right now is extremely hard precisely BECAUSE of this.

Hmmm...



I've got it! Let's pass a law to stabilize the stock market! Now, how do we do that...

Asherian Command wrote:Blame Reagen.

You do realize that Reagan actually created a gak TON of jobs during his tour as President, and the country was making alot of cash flow as a result right? He did alot of good during his Presidency. Not saying he was a saint or anything, but you might want to check a little more into that statement be fore saying it

I haven't the foggiest.

But we CAN give incentives for small business loans, and make it easier on small business owners in general.

Tax cuts for the rich and for big multinational corporations certainly aren't helping. Heck, even if the tax cuts aren't repealed, we should be closing loopholes to force companies to pay taxes for their income when they try to use overseas tax shelters...

Many big corporations pay no taxes at all, and some of them (I remember Google being cited as one of them) pay less in taxes as a percentage of their income than anyone who is above the poverty line.

As an aside, I don't think it's immoral of the companies to do so, they're just doing what's best in the law for their company. So we should change the law.

Currently, the top corporations are collectively essentially sitting on about 2 trillion dollars of money. Their investments are extremely cautious at their very best (when they are happening), as because of these cash reserves they feel they can just wait out and weather the storm.
***They need to. But investments are being made, just not here. They are being made where labor costs and environmental costs are low, and future business is expected to be.

Trying to get a loan (for expansions, to obtain new equipment, to hire new workers, etc) as a small business right now is extremely hard precisely BECAUSE of this.
***You’re conflating corporations with banks and financial institutions. Corporations don’t generally lend money.



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Melissia wrote:I haven't the foggiest.

But we CAN give incentives for small business loans, and make it easier on small business owners in general.

Thats situation will be corrected in early 2013.

I certainly hope so.

Small businesses employ over half of the nation after all, and it's easier to get someone to start a new business than to convince a big business to expand and KEEP the expansion instead of constantly cutting back.

Melissia wrote:I certainly hope so.

Small businesses employ over half of the nation after all, and it's easier to get someone to start a new business than to convince a big business to expand and KEEP the expansion instead of constantly cutting back.

Oh they are expanding, just not in the US or Europe, but they are definitely expanding.

Frazzled wrote:Oh they are expanding, just not in the US or Europe, but they are definitely expanding.

Well...not Western Europe.

Okay, expanding in a way taht the ~18 percent of US population which is unemployed cares about?

Melissia wrote:Okay, expanding in a way taht the ~18 percent of US population which is unemployed cares about?

Oh they care about that. I know I do.

Its like illegal immigration. You can make all the minimum wage laws you want but when you have an open border it doesn't mean that much.

You mean a 2000 mile border with a country is exorbitantly expensive to police effectively?

Geeze, next thing you'll say is that it's hard to track corruption in Russia.

Troy wrote:Thats so full of gak its not funny. If you've a burr in your butt, just cut the government a bigger check.

As I pointed out above, that argument is stupid to anyone who understands the concept that some numbers are bigger than other numbers.

If you were to believe that everyone should pay 1% more of their income in tax, you could send the government a cheque for 1% of your income, say you earn about $50,000, and so the government would get $500, thereby reducing the 2010 deficit of $1.29 trillion by 0.0000388%. 0.0000388% is a very, very small number. This is because $500 is a very small number, while $1.29 trillion is a very big number.

However, if you were to convince everyone that they should pay an extra 1% of their income as tax, say by passing a law raising taxes by 1%, then you'd generate an additional $147,000,000, which would decrease the 2010 deficit of $1.29 trillion by 11.40%.

As you can see, 11.40% is a much bigger number than 0.0000388%.


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biccat wrote:As for your initial question of "where's the jobs," well, in '02-'03, the unemployment rate was nudging 6%. The tax cuts were enacted and unemployment rate went to under 5% in '06-'07. Therefore, the immediate effect of the tax cuts was to reduce unemployment.

Sure, because any action that decreases government revenue while increasing or maintaining spending will increase total economic activity, and therefore lower unemployment.

Of course, enacting a permanent change* to tax law to produce a temporary stimulus, to address a small economic downturn is absolutely idiotic, but I doubt we'll ever see the Republican footsoldiers of Dakka to consider that.





*The tax cuts aren't technically permanent, of course, given the sunset clauses, but given how rabid the GOP is about defending them they certainly see them as such.


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Kilkrazy wrote:A lot of them are investing money in shorting bank shares, or commodities, or dodgy Greek government bonds. None of those help build infrastructure for the long term, or generate a useful short term boost.

I don't know to what extent we can blame the rich alone. Most of us have pension funds. It is often the pension funds doing the investing.

Well that's basically it. You can't just expect other people to spend and invest their money in a purely altruistic manner, most everyone thinks about themselves and their families first.

But you can change the rules of the system so that the self-interested spending and investment choices are the ones that produce the most overall good. That in a nutshell is basically what the study of economics is.


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KingCracker wrote:You do realize that Reagan actually created a gak TON of jobs during his tour as President, and the country was making alot of cash flow as a result right? He did alot of good during his Presidency. Not saying he was a saint or anything, but you might want to check a little more into that statement be fore saying it

Well, of course Reagan created jobs. He cut taxes and ramped up spending, that basically has to create jobs*. It can't not create jobs, despite what the looniest fringes of the Tea Party have been pretending to believe this year. The issue is that to do that, you have to borrow money that at some time or another you will have to pay back. This is a justifiable policy during recession** when the private sector is declining and you need something to maintain aggregate demand, but you then need to tax more and spend less during periods of growth.




* He also happened to president during the microcomputer boom. That doesn't hurt either.

** Recession, like say, the one you're having now. Is it becoming obvious how completely incoherent the economic arguments of the right wing are yet?

And to think, this entire recession could have been prevented if the Republican push for deregulation wasn't so successful.

Taxes on the rich, middle class. etc etc etc. Raising or lowering these is not going to help much either way. Except when you raise them, people get to keep less of their hard earned dollars.

The tax rate people should be looking at is the Corporate tax rate, which in the USA is the highest rate in the world.

Lowering of the corporate tax rates, and then closing corporate tax loopholes will do everything everybody wants. It will provide a solid base for companies to plan from, and hire new people, buy new tools etc. It will actually raise revenue levels, because of the closed loopholes, and the increased business activities.

People will get hired, which then provides more tax revenue in the way of payroll taxes, and sometimes income taxes.

The way the corporate tax setup is now, does one thing; Hurts the small businesses, who can not afford to do the loopholes, but get to pay full rate.

Small businesses make up the majority of corporations in the USA, and provide more jobs combined than the large corporations. For those of you do not run a small business, let me tell you, filing taxes 5 times a year is a royal pain in the butt, takes a lot of time, and you never know if you did it right. A simplified ax code would go a LONG way.

Combine the problem of highest corporate tax rate in the world with some of hardest regulations in the world, and it is no wonder we are where we are.

Shadowseer_Kim wrote:Taxes on the rich, middle class. etc etc etc. Raising or lowering these is not going to help much either way. Except when you raise them, people get to keep less of their hard earned dollars.

Corporate income tax accounts for 9% of total federal revenues. Income tax receipts account for 42% of federal revenues. So basically that's just not true.

The tax rate people should be looking at is the Corporate tax rate, which in the USA is the highest rate in the world.

Lowering of the corporate tax rates, and then closing corporate tax loopholes will do everything everybody wants. It will provide a solid base for companies to plan from, and hire new people, buy new tools etc. It will actually raise revenue levels, because of the closed loopholes, and the increased business activities.

People will get hired, which then provides more tax revenue in the way of payroll taxes, and sometimes income taxes.

There is actually no magic solution that will grow revenue and bring in more money. This idea that there's people that would invest more and create more jobs if only the tax rate was 5% lower - it really doesn't make any sense. If there's an opportunity to invest and bring in money, people will do it whether they get to keep 65% or 70% of the profit.

That said, It would be nice if GE paid more corporate tax, given they're currently paying $0. So I do agree with reforming the system.

Small businesses make up the majority of corporations in the USA, and provide more jobs combined than the large corporations.

The first claim is misleading, and the second is plainly and objectively false. Small business actually produces just 8% of all jobs in the US.


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Melissia wrote:And to think, this entire recession could have been prevented if the Republican push for deregulation wasn't so successful.

Deregulation has been the darling of both parties, and most every other mainstream political party in the world, for at least two decades. And in a lot of places deregulation has done a lot of good.

So while I agree that the drive towards deregulation has to stop (or at least see some level of economically information enter the debate), it's a lot more complicated than just blaming it on the Republicans.

Oh please, corporations in the US pay very, VERY little actual income tax. Certainly not the actual rate, that's for sure.


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sebster wrote:Deregulation has been the darling of both parties, and most every other mainstream political party in the world, for at least two decades. And in a lot of places deregulation has done a lot of good.

So while I agree that the drive towards deregulation has to stop (or at least see some level of economically information enter the debate), it's a lot more complicated than just blaming it on the Republicans.

Maybe it's just my location biasing me, but I haven't heard the cries for deregulation much from anyone but the conservative right wing voting block...


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sebster wrote:The first claim is misleading, and the second is plainly and objectively false. Small business actually produces just 8% of all jobs in the US.

Your information is definitely incorrect here.

Small businesses employ over half of all private sector employees and pay over fourty percent of the US private payroll, along with having generated over sixty percent of new jobs in the last fifteen years.

From the SBA.gov website:
http://www.sba.gov/advocacy/7495/8420

Companies will never hire people because of taxes, they will hire people when they need them. Most companies will ask their workers to do more work before they justify adding positions in, and this is not matter what the economy is at. Right now corporate America is at 2 trillion dollars in profits, the all time lowest taxes in like 60 years, and all time low interest rates. If they wanted to expand and hire more people now would be the best time ever.

The GOP uses this as a political tool help out the rich. 1% of Americans are millionaires, and 65% of elected officials are also millionaires. That creates some bias. Both political parties cater to the rich and to mega corporations, but the Republicans are just the most vocal about it. Saddest part is, people believe their lies and the scary part is I think they actually believe their own lies.