Always the strangled, desperate cries from the oligarchy echoing from the mansions on the hills that increasing taxes on the wealthy will destroy the economy and reduce employment.
Increasing taxes on the wealthy absolutely creates jobs. If done properly, of course. It is less a matter of the numbers than how those numbers are applied. Which would require other measures which are desperately needed to restore income equity in this country.
Here are a few of those measures. The thing to note most of all is that many of these measures are not new. They actually existed in our legislative code during the most profitable years for the general population in this country. Those regulations have been gradually eliminated ever since Reagan.
Investments. One of the most important measures which should be enacted is eliminating the allowance of stock purchases as business expenses. The single exception may be stock purchases as an expense for businesses that are focused entirely on stock trading. Not allowed for banks or any other business where stock trading is not their only business function.
The result. The nature of business is that businesses hate taxes. That makes sense. They don’t want to pay money for which they perceive nothing directly in return. So to pay less in taxes because of deductions for business expenses, they would have to spend money. That money would be spent on capital investments, such as equipment upgrades, new equipment and other investments to expand business, creating jobs. It would even, dare I say, be spent on higher wages and benefits for employees.
Slowed automation. It would also slow the pace of automation which eliminates jobs. Automation is invested in because it increases profits. If those increased profits are simply subjected to higher taxation rates, the benefit would be lost. It would not stop automation, just slow it down.
Higher taxes for foreign investment profits. Investors and corporations invest in foreign manufacturing for lower labor costs. If taxes were increased to equal or (preferably) higher than domestic production costs, this would negate any labor cost difference from exporting jobs to other countries.
Higher taxes for offshore headquarters. A number of corporations have changed the official registration of their corporate headquarters to other countries to avoid US taxes. This could be nullified by charging equal or higher taxes for any corporation that has done this. Simply apply taxes for all profits made from domestic sales to these entities. Most of the time, the actual operating headquarters are still located inside the US and the offshore “headquarters” amounts to nothing but an office or even a PO box.
Equity investors. Equity investors can be one of the most problematic for this country. By equity investors, that means real estate investors that own rental properties, from malls to warehouses to apartments to single houses. Obviously taxes on equity investors should be adapted to scale, so landlords/ladies who own 1 or 2 rental properties are not taxed as harshly as large property management companies. For the large companies, increased taxes would force them to spend more money on property improvement.
This must be balanced with rent controls at local levels. Otherwise, the result would be gentrification, which we have already seen run rampant across the country. Companies use property improvements as tax deductions, then use the improvements as justification for jacking rent sky high, forcing out existing lower income residents. It often also results in increasing property values, causing nearby home and business owners to be forced out because of property tax increases.
However, property improvements creates jobs for construction and does stand to attract business to areas which are in decline. Or encourages nearby existing businesses to also improve. Increased property taxes for already improved properties results in more revenue for municipal improvements, such as street repairs. If the municipality is not too corrupt. That’s a completely different issue which requires activism at the local level.
Remove the Social Security cap. Right now and for many years, there has been a cap on the amount a person pays into Social Security. At present, the cap on income for which Social Security is collected is $132,900, for which a maximum $8,240 is collected for Social Security. It does not matter how much you earn above that income level, you will not pay another penny toward Social Security.
The claim is that a person above that income level will not benefit from Social Security and so should not be subjected to the tax. However, this is not true. They do benefit, if indirectly. Most of those whose income is above that cap gain their income from methods which mean they gain income from those of us that pay in and the consumers on Social Security. Meaning business owners, whether retail or financial services. So they should absolutely be subjected to the tax which only serves to maintain their profit margin in the first place.
More jobs. Higher taxes for high income “earners” (sic) and corporations results in more jobs, even if civilian contractors are used. The biggest issue is not the taxes but how they are spent.
If civilian contractors are used for infrastructure improvements, nobody decries their right to make profits. Yet if those profits reach the level of the highest tax brackets, the tax revenue collected goes back into the system cycle of: government spending-infrastructure improvement-profit-taxes-government spending-infrastructure improvement… That cycle is broken when a corporation collects profits and pockets every penny. Then the cycle goes: government spending-infrastructure improvement-profit. Period. There is no cycle. At that point, for further improvement, the cost is entirely on the middle class taxpayer.
More bridges, fewer bombs. In spite of the government and media fear mongering screaming how we need more money for “defense” against countries which are no threat to us and extremist groups that have no aircraft to get here, our military and intelligence budget is killing us more than any potential enemy. Anyone sane does not approve of how much this country is spending on warfare with no end in sight.
Weapons do not create jobs. Building weapons may create a few jobs but most weapons production jobs are automated. We create more jobs when we spend money on infrastructure improvement, education, healthcare and even food stamps than we create from weapons sales or corporate subsidies for oil companies. When we create those jobs, they are not limited to specific geographic areas, where weapons manufacturing remains fixed in specific locations. The money spent on these functions goes into salaries and activities which benefit local communities. Those jobs mean more consumer spending, meaning more local tax revenue for more municipal improvements. They support home purchases, vehicle purchases and general consumer spending. Once again, those jobs mean more taxpayers paying taxes which go back in the system, perpetuating a cycle. These activities improve lives rather than destroying them.
So let’s close our ears to the mournful wail coming from private jets and penthouses, private estates, exclusive resorts and corporate boardrooms filled with those who already have more money than they could spend in 10 lifetimes. Let’s start thinking about ourselves and our neighbors. Let’s take steps that create real jobs for real people. I don’t know about you but my ears hurt from listening to their pitiful crying.