Wednesday, May 4, 2011
Small Business Owners Acknowledge that the Concept of Tax Breaks Stimulating Their Businesses is a Fantasy
"We are fed by our consumers, not by our tax breaks," says Rick Poore, owner of Designwear, Inc., a screen-printing business based in Lincoln, Neb. "If you drive more people to my business, I will hire more people. It's as simple as that. If you give me a tax break, I'll just take the wife to the Bahamas."
Read this article: http://www.huffingtonpost.com/2011/05/04/small-business-owners-bush-tax-cuts-rich-repeal_n_857204.html
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Im sure this statement will up set the liberal contingent but there is actually a pretty strong economic evidence that shows tax breaks for corporations and wealthy stimulate the economy. a tax break for the wealthy encourages them to take their money and invest it. their possible returns are higher, making investment into parts of business and the economy more enticing. this stimulates the economy. its not necessarily the best way to go about it but the logic is there and has been proven historically. In this example about a screen printer the point is being missed. He wont be to affected by a tax break but he will feel it when more orders come in because eg. Bank of America decides to take some idle money and invest it in marketing a new product that in turn needs 15k stupid little shirts or towels or something. then designwear, inc. will star hiring
ReplyDeleteFirstly, thank you for making Sort of a Giant Blog your go-to place for political discussion. This is what makes it sort of giant.
ReplyDeleteI hear what you are saying in a sense—at least to the extent that I believe you that there is evidence that lower tax rates for the wealthy and for corporations show some sort of correlation to economic stimulus. With that said, it is essentially the basis for “trickle down economics” which I believe has proven completely ineffective in helping the middle and lower classes over the past 30 years over which it has been tried. Add to that the fact that our current political/economic discussion in this country involves the serious consideration of eliminating services and education for the least fortunate amongst us, and the idea that continuing to provide tax breaks to wealthy individuals will benefit us as a country starts to crumble. No matter what the rhetoric is, we cannot afford to consciously limit our nation’s revenue when we are in such a difficult position to begin with.
Ultimately, it really is an issue of who we are as a country. If we elect to protect the wealthiest individuals’ fortunes while denying poor people healthcare, education or other necessities, our priorities are quite clear. In my opinion it is nothing less than shameful to even give consideration to such an off balance solution. We’ve tried this already and it doesn’t work. In fact, it’s quite easy to argue that such lopsided policies played a substantial role in getting us into the economic mess we are presently struggling with.
If things were a bit rosier. If we had a budget surplus and everything was going great guns, I could see even supporting a reduced tax rate for just about anyone—rich or poor—rather than opposing the idea.
And though your example of an exciting market full of people ready and eager to invest does sound nice, and surely would have positive economic consequences, I really disagree that it’s justifiable or even remotely logical given the circumstances.
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ReplyDeleteBuzz words like trickle down economics cast a negative light onto something that is in effect useful. If the goal is to stimulate the economy then these tax breaks are effective. whether the middle and lower class benefits directly is another issue. one that i am not arguing. i am arguing that these practices will stimulate the economy. in this case trickle down economics is not applicable cause the point is not who gets the money but rather that the money gets spent and products get invested in and GDP goes up.
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