Common sense is often so uncommon that it can be heralded as a virtue. So can be said about the bush tax cuts for the wealthiest 2%, it is simply a long scam being sold as a job-creating solution (and I know a long scam when I see one). One very simple thing I point out, I oppose any tax cuts at this time because of the strain they put on the national debt. But this snake-oil gimmick being paraded by the Republicans is beyond stupidity, and the average joe-schmoes that are backing it knowingly or unknowingly being played into this unnecessary transfer of wealth.
1. Giving a tax cut will not create jobs
Say I own a diner and I somehow clear over 250K a year. If I get a tax break of another 10K per year, does that mean I am going to hire another waiter to sit around and swat flies. The only time I would hire a new employee is if I get more people to eat at my diner, which would happen if more “regular” people got a tax cut and decided to eat out more often. In any case, trickle down to me is still a silly myth, and I am still awaiting proof that it actually works.
2. The S-Corp bonanza
Small business owners are mostly registered as S-Corps; simply they want to avoid the double-taxation conundrum. So most of them are drawing modest paychecks and realizing their income through dividends which by the way are taxed at a lower rate. So the marginal tax increase has almost no effect on small business owners (first hand knowledge). And in any case, most small business owners never even draw 250k for they leave the majority of their earnings in the company’s books for rainy days and growth days.
3. The Hedge Fund operator
The most profitable hedge fund owner made a 4 billion dollars last year. Without getting into a debate about his economic value, I can be reassured that he is not going to add a single job in this economy from his 20+ million dollar tax cut. Again its demand that creates jobs, not job-creators with a tax cut. The highest earners in this country are nota Ford or aÂ RockefellerÂ anymore, who created tangible products and generated economic value; the new high-earners are nameless faceless sharks who are sitting behind concrete walls creating money from air from speculation and puppetry.
4. The deficitÂ dilemma
Why the hell is any tax cut a good idea? There is only one reason – politicalÂ correctness. I can say, even with my limited grasp on economics, that tax cuts at this point is more populist than realistically viable. The debt ceiling will only rise that much each year, and the time is not far when the rest of the world will not be as keen to buy more American treasuries.
5. The holy defense budget
Instead of tax cuts, why not spend 50 billion dollars on the country’s infrastructure – maybe we can unclog LA’s highways, or put fiber in every home, or build subway systems, fix our bridges, mass-produce and adopt green tech, and create 2 million jobs in doing so. Where could that money come from, how about cutting less than a tenth of the defense budget. People are often amazed when they hear that the US spends almost a trillion dollars (700b on DOD, 150b on wars, the rest on DHS) a year on defense, dwarfing the next biggest spender, China (70b). Â More on that another rant.
6. Wait wait, don’t tell
Very soon there will be a bleak future and our overlords will try to milk the black from the darkness. To get elected you keep giving these tax cuts, you keep increasing the deficit, you see no trickle down jobs, you slowly wipe out the middle class, you need to give more tax cuts to your biggest donors, there is nothing else to cut in the budget, so you cut everything else, start with local law enforcement, slash medicare, privatize social security, cut science funding, cut state match grants, privatize everything to a few big conglomerates, brand it capitalism, credit the founders, roll around in greenbacks with the rest of the plutocrats. Hello Russia.