DiscussWorldIssues - Socio-Economic Religion and Political Uncensored Debate - View Single Post - Tax Deal: GOP to allow unemployment checks to resume in return for tax cuts for rich

**6M8PJigS** · 12-07-2010, 07:05 AM

I'm disappointed that the canard over the rich being the gatekeepers of job-creation wasn't more forcefully dismantled in this debate.

Point #1: Job growth is predicated on one thing: Consumer demand for products. If you hand a wealthy owner of a car dealership $10,000, do you think he's going to suddenly call a meeting with the dealership's partners to say "I got a big check - let's hire up?" Nope. Hiring will happen only if cars start flying off the lot and they run short of sales people to deal with the rush of customers. That owner of the dealership is going to park that money in the bank, or possibly in an off-shore tax shelter on the Cayman Islands.

Point #2: The numbers waved around suggesting that three quarters of a million small businesses fall into the over-$250k taxable income range is ridiculously padded. Where it comes from is that many wealthy folks incorporate small businesses around single-person activities as tax deductions. A large number of the 750,000 "wealthy" small businesses claimed by the GOP are exactly this. For instance, they rent a guest house and claim the rental income as a business. They rent their boat, they consult, they day-trade. And then they file a schedule C to claim home office and other deductions. When they get their tax windfall, will there be hiring? No. They're going to park that money in the bank, or possibly in an off-shore tax shelter on the Cayman Islands.

In the real world, let's say you've got a real small business owner who owns a pizza place. He files as an S Corp, so company profits flow into his personal tax return. The real-world small business owner will know in the 4th quarter if he's had a good year. If the summer got strong, he hired in the summer. If it looks like he's headed into the winter with a windfall, the real-world small business owner will do those repairs on the ice maker, get a new oven, get some new chairs for the dining room.

Find someone in that top 2% who can say with confidence that the tax cut alone will be the deciding factor in whether any business they own will hire more people in Q1 or Q2. I don't think they exist.

12-07-2010, 07:05 AM	#6
6M8PJigS Join Date Oct 2005 Posts 439 Senior Member	I'm disappointed that the canard over the rich being the gatekeepers of job-creation wasn't more forcefully dismantled in this debate. Point #1: Job growth is predicated on one thing: Consumer demand for products. If you hand a wealthy owner of a car dealership $10,000, do you think he's going to suddenly call a meeting with the dealership's partners to say "I got a big check - let's hire up?" Nope. Hiring will happen only if cars start flying off the lot and they run short of sales people to deal with the rush of customers. That owner of the dealership is going to park that money in the bank, or possibly in an off-shore tax shelter on the Cayman Islands. Point #2: The numbers waved around suggesting that three quarters of a million small businesses fall into the over-$250k taxable income range is ridiculously padded. Where it comes from is that many wealthy folks incorporate small businesses around single-person activities as tax deductions. A large number of the 750,000 "wealthy" small businesses claimed by the GOP are exactly this. For instance, they rent a guest house and claim the rental income as a business. They rent their boat, they consult, they day-trade. And then they file a schedule C to claim home office and other deductions. When they get their tax windfall, will there be hiring? No. They're going to park that money in the bank, or possibly in an off-shore tax shelter on the Cayman Islands. In the real world, let's say you've got a real small business owner who owns a pizza place. He files as an S Corp, so company profits flow into his personal tax return. The real-world small business owner will know in the 4th quarter if he's had a good year. If the summer got strong, he hired in the summer. If it looks like he's headed into the winter with a windfall, the real-world small business owner will do those repairs on the ice maker, get a new oven, get some new chairs for the dining room. Find someone in that top 2% who can say with confidence that the tax cut alone will be the deciding factor in whether any business they own will hire more people in Q1 or Q2. I don't think they exist.
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