Higher taxes and job creation are the oil and water of economics. They simply don't go together.
It's a basic concept. The more a business gives to the government, the less free cash it has to use on new salaries. It's why John McCain wants to cut the corporate tax rate to 25% from 35%. That extra 10% can go toward hiring a lot of workers and keeping jobs in the U.S. Remember America has the 4th highest corporate tax rate in the world. It's no wonder jobs continue to move overseas.
This is not a partisan argument. Many Democratic leaders feel the same way and understand the damage higher taxes will mean for job creation. Consider this excerpt from today's Wall Street Journal:
The Obama plan is an incentive to hire fewer workers. Barack Obama declared last week that his economic plan begins with "one word that's on everyone's mind and it's spelled J-O-B-S.". This raises the stubborn question that Senator Obama has never satisfactorily answered: How do you create more jobs when you want to levy higher tax rates on the small business owners who are the nation's primary employers? Loyal Democrats have howled over the claim that small businesses will get soaked by the Obama tax plan, so we thought we would seek an authority they might trust on the issue: Democratic Senate Finance Chairman Max Baucus of Montana.
Here is what Mr. Baucus wrote in a joint press release with Iowa Republican Charles Grassley on August 20, 2001, when they supported the income tax rate cuts that Mr. Obama wants to repeal: ". . . when the new tax relief law is fully phased in, entrepreneurs and small businesses -- owners of sole proprietorships, partnerships, S corporations, and farms -- will receive 80 percent of the tax relief associated with reducing the top income tax rates of 36 percent to 33 percent and 39.6 percent to 35 percent.". Then they continued with a useful economics tutorial: "Experts agree that lower taxes increase a business' cash flow, which helps with liquidity constraints during an economic slowdown and could increase the demand for investment and labor.". Twelve Senate Democrats voted for those same tax cuts. And just to be clear on one point: An increase in "the demand for investment and labor" translates into an increase in J-O-B-S.
So if lowering these tax rates creates jobs, then it stands to reason that raising these taxes will mean fewer jobs. From 2003 to 2007 with the lower tax rates in place, the U.S. economy added eight million jobs, or about 125,000 per month. The Small Business Administration says small business wrote the paychecks for up to 80% of new jobs in 2005, for example. Mr. Obama's tax increase would hit the bottom line of small businesses in three direct ways.
Since Senator Baucus is on the record agreeing lower taxes are good for jobs, why has he and the other Democratic leaders who voted for this suddenly clammed up? They have either done the world's greatest flip-flop on the impact of tax hikes on jobs, or have spoken up privately and been ignored by the Obama camp.
So that's small business. But what about the big boys? If you believe the hype that big business doesn't pay taxes, consider this: last year ExxonMobil paid more in taxes than the bottom 50% of the entire population of American taxpayers. So if you are one that has come to believe you should hate "big oil," consider what your tax burden would be if that $30+ billion (which is on its way to $40 billion for 2008) in tax revenue paid by Exxon suddenly dried up.
So since the Congressional record proves that many Democrats understand the relationship between jobs and taxes as well as any supply-side Republican, their silence surrounding the proposed tax increases speaks volumes about where their true interests lie.
Am I the only one that seems to notice that as the unions demanded more wages and benefits, and the Congress places more tax burdens on business, more jobs go overseas. People start a business to earn a profit, not to support workers. That is simply a byproduct of making a profit. If you can make much more money by moving to another state, I believe most of you would move. If a business can make a better profit by moving to a place that doesn't seem to hate them, then I say move! This country needs to wise up, and look at the simple economics of business. If the government taxes you more, you have less money to spend. If employees keep demanding more, eventually the well runs dry. Look at what is happening to GM. Their employee costs are putting them out of business. The only thing a business owes their employees is a check in exchange for work. They don't even owe you a job! Everything beyond that is a gift!
October 22, 2008 at 2:05 pm
Mike P
Wayne S - backwards economics to save the wealth of the wealthy? Was your MBA in Communist Finance? Why is it such a crime for someone to create wealth? They take all the risk, and assume all of the reward. Or lose it all. And pay taxes on their wealth.
When I know people who won't find a better paying job because they qualify for state assistance to supplement their $6 an hour job - and there is no incentive to work more because they'd lose their handout, what does that say? I have much more respect for people that have fought tooth and nail to make it big. Why don't you go read T. Boone Pickens book? He was born near dirt poor and made it on his own. No silver spoon. And no government assistance.
October 22, 2008 at 11:08 am
chris
New business alwas evaluates the profitability of a new venture. Part of this evaluation includes taxes. If the corporation built in a neighboring town which offered better tax incentives, then the neighboring town gets the jobs and subsequent boost to its economy and tax revenues. Its so simple...and we have millions of examples, why the protax crowd refuse to see them is mind boggling.
October 22, 2008 at 10:58 am
Mike P
I worked for seven years for a company that hired Contract Labor for medical records processing from home. When I approached the contractors about working more hours because they hadn't approached 40 hours in a week, to a man, they all declined claiming that they would be pushed to a higher tax bracket and there was no incentive to work more, because the government would take a higher percentage of their income away. So it's not just "small businesses" that feel the pinch. It's the individual self-employed people who are aware of the tax structure and the ceiling they do not wish to break through. Lowering taxes not only helps small businesses retain income for spending, but also helps individuals recoup more of their contract money - allowing them to work more and not feel like they are being cheated. This would have a trickle down effect where the businesses and individuals would have more to spend or invest.
October 22, 2008 at 10:52 am
Blake
This is all we need to focus on in my opinion:
"...income tax rates of 36 percent to 33 percent and 39.6 percent to 35 percent. Then....."
What the heck is wrong with us? We should already have thrown all of these bums out of office! We are giving a USELESS government this kind of money to squander? Give it to the crack heads in the inner city?
We need a revolution. A big one.
October 22, 2008 at 10:14 am
Suzan
I would like to comment on Kevin's response. His argument works fine as long as demand for the product or service that the business is selling is stable or increasing, but this doesn't work where the demand for the product or service decreases. It may be fine to say that the owner will always hire when his profits will increase by hiring the new worker, but if the demand for his product or service is in a decline and he can't make the sales, he won't hire that new worker. In this ecomony, consumers are tightening up and not as willing to spend on "extras", so unless the product or service in question is a necessity, this won't necessarily work. Look at the auto industry, for example. You see constriction and consolidation occuring - why, because no one is selling cars. Consumers aren't buying the cars. This should be taken into consideration.
October 22, 2008 at 10:01 am
Wayne S
What makes you think Barack Obama and his handlers want to create jobs? Having grown up in Chicago, the game is simple:
- Tax the heck out of business and the rich to support vote getting and government jobs (The only day you are required to work is election day).
- When business leaves, double up on the existing business to support the new government jobs.
- Any business or citizen gets out of line: Red tag their building, dig up their lawn (happened to my 70 year old Mom for complaining about taxes), etc.
When you reach 50% people dependent on the government, you can't lose an election. Why would Obama want to create now jobs in his "57 states" during his "10 year term?"
October 22, 2008 at 9:01 am
The I
This fallacy of linking taxes to job creation is merely a ploy to lure the uneducated. Businesses assess risk and profitability in a forward view. That is, what is my return if I invest this amount of money into a project. They also assess their after tax profits in this analysis. Businesses do not create jobs based on what they have as residual income. For instance, if a company can borrow at 8% and have a return of 19%, wouldn't that company not borrow to make the profit? Does it matter how much money was left over from the previous year after taxes? I have an MBA in a Finance. So these guy can throw out these lower taxes equals job growth equations, but then I can say I can see why the economy is in such shambles also. Completely backwards economics to preserve the wealth of the wealthy.
October 22, 2008 at 4:16 am
Kevin
I fail to see the "incentive to hire fewer workers" by an increase of small business owners income taxes from 33% to 36%. A small business would of course rather have the lower tax rate, we all would. But I don't believe it reasonable to say a small business owner who grosses say a million per year and nets $200,000 views the tax increase as an incentive to hire fewer workers. I'm a CPA, and I know business owners try to maximize profits. A business will hire a worker who will produce a pretax profit through his production.
A business owner does not decide that he used to make about $30,000 profit by hiring another electrician or plumber, but now since the tax hike he makes 3% less or only $29,100 extra profit. So does he think that is so much less it's not worth it? I don't think so.
If a business can make more profit, they will add a worker. Taxes are on profits, not on the number of workers you have on your payroll. There is no disincentive here.
If a worker adds enough productivity to increase your pretax income, he will add to your after tax income.
October 21, 2008 at 5:59 pm
susan b.
The flat tax, fair tax, consumption tax, whatever you want to call it is the only way to go... Huckabee had it right. But then I guess we would have to worry about all those folks that work at the IRS being unemployed, I'm sure we would all lose sleep over that!
October 21, 2008 at 4:51 pm
Vernon
If the same supply side economics are used you cannot have both. However if you change to a demand side economic policy jobs will be created not only jobs but business also.
October 21, 2008 at 2:42 pm
6ftrabbit
I disagree. We can have both if everybody works for the Gov't. ;) Won't even need money at all. Just stand in line to get what the Gov't decides you need, and assigns you to a collective. Just think, no more financial headaches to keep you awake at night. Oh, the joy! /sarc off .
October 21, 2008 at 2:38 pm
Larry
A fact that most Dems won't admit to is that when taxes, personal and cap gains, are cut money to the treasury increases as does the employment level. The Heritage Foundation has some great data from JFK and Reagan's tax cuts. However you never get to see it on TV or CSPAN ...
Cap Gains Tax Rate vs Fed Revenue Chart from 1960 to 2000
http://www.heritage.org/Research/Taxes/images/50284215.gif
Reagan Tax Cuts vs Fed Revenue
http://www.heritage.org/Research/Taxes/images/26961470.gif
Kennedy tax cuts and Fed Revenue
http://www.heritage.org/Research/Taxes/images/58872464.gif
These numbers come from the Department of Commerce, Beureau of Economic Analysis, and the Department of the Treasury.
October 21, 2008 at 2:36 pm
cris
I think we have repeated this enought times for Obama to understand...Yet I have not heard a counter. Does he understand who CREATES jobs in America? By the way, there is no way you can in a capitalist system prevent a company from shipping jobs overseas. You can provide incentives for them to stay, in the form of tax cuts, but Obama proposes the opposite. His economic plan is a recipe for absolute disaster.
October 21, 2008 at 2:21 pm
K. Ross
Tis true, we can't have both. I honestly wish that more of us could use history as a tool to make better decisions. My dad used to tell me that making mistakes should be part of a learning experience. He also said that the smartest of men would learn not only from their own mistakes but from others including those from history. If we are honestly concerned for the well being of the economy and the state of our great country then we should take some lessons from history. In the late seventies we had some serious economic problems, part in parcel due to a mid east oil embargo. This created a gas shortage and higher prices at the pump. Hmmm, sounding familiar here? High taxes on corporations and small businesses created a high unemployment rate and the spiral down began to get faster and tighter. Along came this radical conservative running for President espousing a program to fix our economy. He would lower taxes, and that would stimulate growth. Growth would provide more jobs, more tax payers and thus fatten the government coffers. It worked and we enjoyed some of the best growth, great education, an unprecedented strengthening of the dollar, and some of the biggest technological advances in history. That is just one example of what we can learn if we just take a moment to reflect and make good informed decisions to get past this debacle and move into the future.
October 21, 2008 at 2:06 pm
John Pring
I think we all can agree that it doesn't take a rocket scientist to understand that if you tax any company at higher levels, it is significantly less likely to invest in new employees or equipment. If you want to grow the economy, it becomes intuitively obvious that you need to provide real incentives to investors. Why should anyone invest their financial resources when the potential rewards do not offset the risk (and higher taxes)?
October 21, 2008 at 2:01 pm
Michael L. Wagner
On the topic of jobs: How about how both candidates advocate more H1B visas for foreign skilled workers to come here and take American's jobs away from them...
Regarding taxes and Big Oil:
Read: (2008) US House report:
The Truth About America's Energy: Big Oil Stockpiles Supplies and Pockets Profits:
--in 2004, Congress released millions of acres of protected public lands to oil drilling, yet: Onshore = only 13 million out of 50 million acres have been developed. Offshore = only 10 million of 45 million acres developed.
Meanwhile, the Colossal Magnetic Levitation Wind Turbine's output = a small nuclear power plant = a tiny $53 million price tag = $.01 per kilowatt hour!!!! Plus, its low-center-of-gravity = perfect for offshore = unlimited potential = areas surrounding the US = 24/7!!!!!!!!!
And the Lithium-ion Battery charges from 10% to 80% in 10 minutes (Wikipedia-electric Vehicle-6.2.5)
(2007) Gizmag:
Subaru doubles the battery range of its electric car concept:
--whatever-size lithium-ion battery = charges from 0% to 80% in 15 minutes!!!
My point is:
On the one hand, we could have lots more money to spend if Big Oil & Co hadn't killed the electric car (Big Oil "bought patents to prevent modern NiMH batteries from being used in US electric cars," Wikipedia-Who Killed the Electric Car?), this where: Any increase in domestic oil production = even higher windfall profits = closer scrutiny, yet, in fact, the precise reason why Big Oil enjoys a reduced tax burden (compared to other businesses) is so Big Oil has money to develope more energy!!!!!!!!
October 21, 2008 at 1:42 pm
Stevey35B
this is one of those amusing things. The Congressional Budget Office cannot get the tax consequences correct. Every time they run the numbers for a tax increase the CBO forgets people change their patterns to minimize tax consequnces including subcombing to bogus tax relief which Congress states they want to change. Actual revenue never meets anticipated revenue. Whenever the tax rate decreases tax revenue exceeds expectations because people don't have to take tax avoidance relief. And Congress is too stupid to fire these ignorant individuals, worse, belive the lies the CBO propagates, or are idiologically caught up in bad economics.
October 21, 2008 at 1:37 pm
Grant
Brian,
When taxes are increased for giant investor owned companies or small/medium sized businesses the revenues to pay the tax are maerly passed on to the consumer. If ExxonMobil's tax burden goes up $10 Billion you can count on the finished product cost of oil increasing by that amount. The only way Exxon's $30 Billion in taxes paid would ever dry up is if we, the consumers were to stop buying their product. States are finding out that their tobacco tax revenue estimates are falling short of their intended goals due to the fact that no one took into account the number of users that would quit or find alternatives to avoid the tax hike.
October 21, 2008 at 1:23 pm
Gary Driscoll
The arguments that you cite are considerably flawed. They are based on the assumption that businesses cannot recover the extra costs via price increases. They can and do, as anyone who has purchased anything lately can attest. Ultimately, a tax on business is a tax on the collective group of customers, owners, and employees. Most business owners will make sure the extra taxes come out of customers and employees with a preference toward customers. The net of additional taxes is higher prices (inflation) as well as lower wages and fewer jobs.
The real discussion needs to be around DECREASING the size and expense of governments.
October 21, 2008 at 1:14 pm
Mike Considine
So let me get this straight… McCain will cut corporate taxes so that they keep more money so that they can hire more employees (outsource) offshore! What I see there is redistribution of wealth… the wealth of what use to be American jobs to the pockets of the corporations while they send the jobs offshore to countries with cheap (slave) labor.
Obama will give them tax cuts for American job creation.
October 21, 2008 at 1:13 pm
Scott Bourne
Got one word to describe the BO tax system to create J-O-B-S = "FANTASY"
October 21, 2008 at 1:04 pm
Nicole
AMEN!
October 21, 2008 at 12:43 pm
Mike
Love this article. Well said.
October 21, 2008 at 12:35 pm
John
My Dad and Uncles faught in WW2 and Korea against socialism and facisism. Now, here today, Obama constantly talks about the US of A becoming a socialst nation. If many of us really believe that the democrates are taking us down the right road to socialism, then get ready for most of the nation (all of us) being poor and jobless!
October 21, 2008 at 12:35 pm
aboutthis blog
Brian Sullivan joined FOX Business Network (FBN) in April 2008 as an anchor. He co-anchors the 10am-12pm ET hours of the FOX Business block.
Prior to joining FBN, Sullivan served as an anchor for Bloomberg Television where he hosted the programs Morning Call and In Focus.
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Mark Simpson
Am I the only one that seems to notice that as the unions demanded more wages and benefits, and the Congress places more tax burdens on business, more jobs go overseas. People start a business to earn a profit, not to support workers. That is simply a byproduct of making a profit. If you can make much more money by moving to another state, I believe most of you would move. If a business can make a better profit by moving to a place that doesn't seem to hate them, then I say move! This country needs to wise up, and look at the simple economics of business. If the government taxes you more, you have less money to spend. If employees keep demanding more, eventually the well runs dry. Look at what is happening to GM. Their employee costs are putting them out of business. The only thing a business owes their employees is a check in exchange for work. They don't even owe you a job! Everything beyond that is a gift!
Mike P
Wayne S - backwards economics to save the wealth of the wealthy? Was your MBA in Communist Finance? Why is it such a crime for someone to create wealth? They take all the risk, and assume all of the reward. Or lose it all. And pay taxes on their wealth. When I know people who won't find a better paying job because they qualify for state assistance to supplement their $6 an hour job - and there is no incentive to work more because they'd lose their handout, what does that say? I have much more respect for people that have fought tooth and nail to make it big. Why don't you go read T. Boone Pickens book? He was born near dirt poor and made it on his own. No silver spoon. And no government assistance.
chris
New business alwas evaluates the profitability of a new venture. Part of this evaluation includes taxes. If the corporation built in a neighboring town which offered better tax incentives, then the neighboring town gets the jobs and subsequent boost to its economy and tax revenues. Its so simple...and we have millions of examples, why the protax crowd refuse to see them is mind boggling.
Mike P
I worked for seven years for a company that hired Contract Labor for medical records processing from home. When I approached the contractors about working more hours because they hadn't approached 40 hours in a week, to a man, they all declined claiming that they would be pushed to a higher tax bracket and there was no incentive to work more, because the government would take a higher percentage of their income away. So it's not just "small businesses" that feel the pinch. It's the individual self-employed people who are aware of the tax structure and the ceiling they do not wish to break through. Lowering taxes not only helps small businesses retain income for spending, but also helps individuals recoup more of their contract money - allowing them to work more and not feel like they are being cheated. This would have a trickle down effect where the businesses and individuals would have more to spend or invest.
Blake
This is all we need to focus on in my opinion: "...income tax rates of 36 percent to 33 percent and 39.6 percent to 35 percent. Then....." What the heck is wrong with us? We should already have thrown all of these bums out of office! We are giving a USELESS government this kind of money to squander? Give it to the crack heads in the inner city? We need a revolution. A big one.
Suzan
I would like to comment on Kevin's response. His argument works fine as long as demand for the product or service that the business is selling is stable or increasing, but this doesn't work where the demand for the product or service decreases. It may be fine to say that the owner will always hire when his profits will increase by hiring the new worker, but if the demand for his product or service is in a decline and he can't make the sales, he won't hire that new worker. In this ecomony, consumers are tightening up and not as willing to spend on "extras", so unless the product or service in question is a necessity, this won't necessarily work. Look at the auto industry, for example. You see constriction and consolidation occuring - why, because no one is selling cars. Consumers aren't buying the cars. This should be taken into consideration.
Wayne S
What makes you think Barack Obama and his handlers want to create jobs? Having grown up in Chicago, the game is simple: - Tax the heck out of business and the rich to support vote getting and government jobs (The only day you are required to work is election day). - When business leaves, double up on the existing business to support the new government jobs. - Any business or citizen gets out of line: Red tag their building, dig up their lawn (happened to my 70 year old Mom for complaining about taxes), etc. When you reach 50% people dependent on the government, you can't lose an election. Why would Obama want to create now jobs in his "57 states" during his "10 year term?"
The I
This fallacy of linking taxes to job creation is merely a ploy to lure the uneducated. Businesses assess risk and profitability in a forward view. That is, what is my return if I invest this amount of money into a project. They also assess their after tax profits in this analysis. Businesses do not create jobs based on what they have as residual income. For instance, if a company can borrow at 8% and have a return of 19%, wouldn't that company not borrow to make the profit? Does it matter how much money was left over from the previous year after taxes? I have an MBA in a Finance. So these guy can throw out these lower taxes equals job growth equations, but then I can say I can see why the economy is in such shambles also. Completely backwards economics to preserve the wealth of the wealthy.
Kevin
I fail to see the "incentive to hire fewer workers" by an increase of small business owners income taxes from 33% to 36%. A small business would of course rather have the lower tax rate, we all would. But I don't believe it reasonable to say a small business owner who grosses say a million per year and nets $200,000 views the tax increase as an incentive to hire fewer workers. I'm a CPA, and I know business owners try to maximize profits. A business will hire a worker who will produce a pretax profit through his production. A business owner does not decide that he used to make about $30,000 profit by hiring another electrician or plumber, but now since the tax hike he makes 3% less or only $29,100 extra profit. So does he think that is so much less it's not worth it? I don't think so. If a business can make more profit, they will add a worker. Taxes are on profits, not on the number of workers you have on your payroll. There is no disincentive here. If a worker adds enough productivity to increase your pretax income, he will add to your after tax income.
susan b.
The flat tax, fair tax, consumption tax, whatever you want to call it is the only way to go... Huckabee had it right. But then I guess we would have to worry about all those folks that work at the IRS being unemployed, I'm sure we would all lose sleep over that!
Vernon
If the same supply side economics are used you cannot have both. However if you change to a demand side economic policy jobs will be created not only jobs but business also.
6ftrabbit
I disagree. We can have both if everybody works for the Gov't. ;) Won't even need money at all. Just stand in line to get what the Gov't decides you need, and assigns you to a collective. Just think, no more financial headaches to keep you awake at night. Oh, the joy! /sarc off .
Larry
A fact that most Dems won't admit to is that when taxes, personal and cap gains, are cut money to the treasury increases as does the employment level. The Heritage Foundation has some great data from JFK and Reagan's tax cuts. However you never get to see it on TV or CSPAN ... Cap Gains Tax Rate vs Fed Revenue Chart from 1960 to 2000 http://www.heritage.org/Research/Taxes/images/50284215.gif Reagan Tax Cuts vs Fed Revenue http://www.heritage.org/Research/Taxes/images/26961470.gif Kennedy tax cuts and Fed Revenue http://www.heritage.org/Research/Taxes/images/58872464.gif These numbers come from the Department of Commerce, Beureau of Economic Analysis, and the Department of the Treasury.
cris
I think we have repeated this enought times for Obama to understand...Yet I have not heard a counter. Does he understand who CREATES jobs in America? By the way, there is no way you can in a capitalist system prevent a company from shipping jobs overseas. You can provide incentives for them to stay, in the form of tax cuts, but Obama proposes the opposite. His economic plan is a recipe for absolute disaster.
K. Ross
Tis true, we can't have both. I honestly wish that more of us could use history as a tool to make better decisions. My dad used to tell me that making mistakes should be part of a learning experience. He also said that the smartest of men would learn not only from their own mistakes but from others including those from history. If we are honestly concerned for the well being of the economy and the state of our great country then we should take some lessons from history. In the late seventies we had some serious economic problems, part in parcel due to a mid east oil embargo. This created a gas shortage and higher prices at the pump. Hmmm, sounding familiar here? High taxes on corporations and small businesses created a high unemployment rate and the spiral down began to get faster and tighter. Along came this radical conservative running for President espousing a program to fix our economy. He would lower taxes, and that would stimulate growth. Growth would provide more jobs, more tax payers and thus fatten the government coffers. It worked and we enjoyed some of the best growth, great education, an unprecedented strengthening of the dollar, and some of the biggest technological advances in history. That is just one example of what we can learn if we just take a moment to reflect and make good informed decisions to get past this debacle and move into the future.
John Pring
I think we all can agree that it doesn't take a rocket scientist to understand that if you tax any company at higher levels, it is significantly less likely to invest in new employees or equipment. If you want to grow the economy, it becomes intuitively obvious that you need to provide real incentives to investors. Why should anyone invest their financial resources when the potential rewards do not offset the risk (and higher taxes)?
Michael L. Wagner
On the topic of jobs: How about how both candidates advocate more H1B visas for foreign skilled workers to come here and take American's jobs away from them... Regarding taxes and Big Oil: Read: (2008) US House report: The Truth About America's Energy: Big Oil Stockpiles Supplies and Pockets Profits: --in 2004, Congress released millions of acres of protected public lands to oil drilling, yet: Onshore = only 13 million out of 50 million acres have been developed. Offshore = only 10 million of 45 million acres developed. Meanwhile, the Colossal Magnetic Levitation Wind Turbine's output = a small nuclear power plant = a tiny $53 million price tag = $.01 per kilowatt hour!!!! Plus, its low-center-of-gravity = perfect for offshore = unlimited potential = areas surrounding the US = 24/7!!!!!!!!! And the Lithium-ion Battery charges from 10% to 80% in 10 minutes (Wikipedia-electric Vehicle-6.2.5) (2007) Gizmag: Subaru doubles the battery range of its electric car concept: --whatever-size lithium-ion battery = charges from 0% to 80% in 15 minutes!!! My point is: On the one hand, we could have lots more money to spend if Big Oil & Co hadn't killed the electric car (Big Oil "bought patents to prevent modern NiMH batteries from being used in US electric cars," Wikipedia-Who Killed the Electric Car?), this where: Any increase in domestic oil production = even higher windfall profits = closer scrutiny, yet, in fact, the precise reason why Big Oil enjoys a reduced tax burden (compared to other businesses) is so Big Oil has money to develope more energy!!!!!!!!
Stevey35B
this is one of those amusing things. The Congressional Budget Office cannot get the tax consequences correct. Every time they run the numbers for a tax increase the CBO forgets people change their patterns to minimize tax consequnces including subcombing to bogus tax relief which Congress states they want to change. Actual revenue never meets anticipated revenue. Whenever the tax rate decreases tax revenue exceeds expectations because people don't have to take tax avoidance relief. And Congress is too stupid to fire these ignorant individuals, worse, belive the lies the CBO propagates, or are idiologically caught up in bad economics.
Grant
Brian, When taxes are increased for giant investor owned companies or small/medium sized businesses the revenues to pay the tax are maerly passed on to the consumer. If ExxonMobil's tax burden goes up $10 Billion you can count on the finished product cost of oil increasing by that amount. The only way Exxon's $30 Billion in taxes paid would ever dry up is if we, the consumers were to stop buying their product. States are finding out that their tobacco tax revenue estimates are falling short of their intended goals due to the fact that no one took into account the number of users that would quit or find alternatives to avoid the tax hike.
Gary Driscoll
The arguments that you cite are considerably flawed. They are based on the assumption that businesses cannot recover the extra costs via price increases. They can and do, as anyone who has purchased anything lately can attest. Ultimately, a tax on business is a tax on the collective group of customers, owners, and employees. Most business owners will make sure the extra taxes come out of customers and employees with a preference toward customers. The net of additional taxes is higher prices (inflation) as well as lower wages and fewer jobs. The real discussion needs to be around DECREASING the size and expense of governments.
Mike Considine
So let me get this straight… McCain will cut corporate taxes so that they keep more money so that they can hire more employees (outsource) offshore! What I see there is redistribution of wealth… the wealth of what use to be American jobs to the pockets of the corporations while they send the jobs offshore to countries with cheap (slave) labor. Obama will give them tax cuts for American job creation.
Scott Bourne
Got one word to describe the BO tax system to create J-O-B-S = "FANTASY"
Nicole
AMEN!
Mike
Love this article. Well said.
John
My Dad and Uncles faught in WW2 and Korea against socialism and facisism. Now, here today, Obama constantly talks about the US of A becoming a socialst nation. If many of us really believe that the democrates are taking us down the right road to socialism, then get ready for most of the nation (all of us) being poor and jobless!