Friday, January 29, 2010

Right-wing think tank liars

So all those corporate-sponsored right-wing think tanks and President Hoover II are claiming that tax cuts on businesses will cause more hiring? I have only one word to describe that notion: BULLSHIT.

I cannot imagine that any of the people thinking tax cuts will cause increased hiring have ever run a business. I have. I will tell you this: If you gave me a tax cut, it'd go straight to my profit margin, not to new hiring. I hired exactly as many people as I needed to meet demand for my business's services, and NOT ONE MORE. Because my job was to maximize profits, not serve as a welfare agency.

The only sort of tax cuts that would have caused me to hire additional people would have been tax cuts that increased demand for my services -- i.e., CONSUMPTION tax cuts that allowed people to buy more stuff for the same amount of money (because they were spending less money on consumption taxes). But over the past thirty years, we here in the USA have moved taxes significantly away from income taxes and towards consumption taxes, as well as shifting taxation significantly to tax the investor class less and the consumer class more (thanks to capital gains tax cuts and cuts in the top marginal rates, all of which affect the investor class, not the consumer class, and then increases in sales taxes and in payroll taxes, all of which affect the consumer class, not the investor class).

In short, the only tax cuts that could even *possibly* motivate me to hire more people would be tax cuts on consumers -- which, presumably, would create more demand for my business's services, which, presumably, would force me to hire more people to serve that demand. Giving me a business tax cut would just give me more profit, not more hiring, because businesses are for-profit enterprises, not charities, and hire only if increased demand requires them to do so. Only people who are utterly ignorant of how business works could ever with a straight face insist that a business tax cut would cause businesses to hire -- i.e., these "think tanks" suggesting business tax cuts will increase hiring are comprised of either utter cretins, or liars, take your pick.

-- Badtux the Business Penguin


  1. But you've never owned a real business before.

    So how do you know what you'd and how you'd run it?

  2. Err, I *HAVE* owned a real business, as well as having run two other small businesses over the years (I ain't a spring penguin, I've been around). I'm baffled as to why you would think I haven't, I specifically did state that I've owned a real business before in my post.

    I'm curious as to why you believe I would make less profit than possible. I just poked myself, and I'm *still* not a social welfare agency. The whole point of running a business is making a profit. Otherwise you might as well just sit on a streetcorner with a hat in front of you and a sign saying "I'm a loser, please donate", because a business that's not in business to make a profit doesn't stay in business for long, it gets run out of business by others who *are* in business to make a profit.

    - Badtux the Business Penguin

  3. Giving tax breaks to the rich or corporations doesn't do any good. They won't buy more products or services, they'll just sit on the money. If they were to come up with a way for low income workers to have more take-home pay, they would spend it and that would improve the economy.
    Giving money to rich & corp.= Kapitalism.
    Giving money to workers= SOCIALISM!


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