The Wealthy as Job Creators?

[Y2HH]

OK, how about Microsoft, Facebook, Google, Apple, etc. Where there founders rich or middle class?

 

Steve Jobs and Steve Wozniak were middle class -- however, Mark Markkula, who invested in Apple when they were building computers in Jobs' garage, gave them 250,000 dollars as an investment into Apple in 1977.

 

In 1977, 250k was a LOT of money.

[Texsox]

I have friends like this, too, but they have like 1 employee...so I wouldn't call them prolific job creators.

 

You were the one dubious of my claim that the companies I worked for were started by middle class owners.

[Y2HH]

You were the one dubious of my claim that the companies I worked for were started by middle class owners.

 

Yes, but to be fair, I'm dubious of everything.

[Texsox]

Yes, but to be fair, I'm dubious of everything.

 

Which is appreciated.

 

Now how many middle class folks start and maintain businesses of less than say 50 employees versus those that go on to be mega employers?

 

Without any research, my guess is the real job creators in this economy are middle class folks that start and keep running small businesses. If we put more money in the middle class pockets it will create more jobs than concentrating it with the rich.

[Y2HH]

Which is appreciated.

 

Now how many middle class folks start and maintain businesses of less than say 50 employees versus those that go on to be mega employers?

 

Without any research, my guess is the real job creators in this economy are middle class folks that start and keep running small businesses. If we put more money in the middle class pockets it will create more jobs than concentrating it with the rich.

 

I don't disagree. Like I said, I think their idea is that if they cut taxes, people spend those savings in the form of investing in new businesses or hiring new employees, however, I'm not sure that actually happens.

[Jenksismyhero]

Which is appreciated.

 

Now how many middle class folks start and maintain businesses of less than say 50 employees versus those that go on to be mega employers?

 

Without any research, my guess is the real job creators in this economy are middle class folks that start and keep running small businesses. If we put more money in the middle class pockets it will create more jobs than concentrating it with the rich.

 

This is absolutely true. Small and midsize businesses are the most important part of our economy, and unfortunately, our government and policy is set up to completely screw small/mid-size business and middle class people. Poor can't pay for anything. Rich don't pay for anything. The middle gets stuck supporting everyone.

[Texsox]

Which is a roundabout way back to my point. For job creation, I believe we ought to be reducing taxes on the middle class and begin increasing on the wealthiest. The best bang for the buck is having a middle class spending more money.

[bmags]

I can't find 50 employees but 1-99 employees as of 2007 was about 40 million people, looks like 120 mill is total employee figure. Doesn't include 20 million self employed as stats unsure if those are significant livable income folks or just side jobs.

 

So firms of less than 100 employees account for about 1/3 of employees as of 2007. Or at least i think that's what i'm reading:

http://www.census.gov/econ/smallbus.html

[cabiness42]

Which is a roundabout way back to my point. For job creation, I believe we ought to be reducing taxes on the middle class and begin increasing on the wealthiest. The best bang for the buck is having a middle class spending more money.

 

I'm in the very middle of middle class and my effective tax rate is about 5%. How much more money do you intend to give me?

[southsider2k5]

The founders or their investors. I think you're ignoring the investor portion of the vast majority of businesses out there. You may start a business by taking out a personal loan on your house or something, but at some point if the business is really profitable you're going to find investment dollars from rich people to expand the business.

 

Exactly. They may have been middle class at one point, but when they get into the stage where they can afford to pay a bunch of people, they aren't middle class any longer.

[southsider2k5]

You were the one dubious of my claim that the companies I worked for were started by middle class owners.

 

Not started a company. That they were job creators. There is a distinction there that is missing.

[Texsox]

SS, this is more your area, but in your opinion, has the economy changed fundementaly between Carnegie and US Steel and Tumblr?

[southsider2k5]

SS, this is more your area, but in your opinion, has the economy changed fundementaly between Carnegie and US Steel and Tumblr?

 

There is no question.

[Soxbadger]

Everything creates jobs. Sometimes I hate myself because I cant remember this one economist, but basically the idea was that everything adds to the pie. That a criminal is a job creator because criminals = police, security systems, jails, judges, lawyers, etc.

 

 

[Texsox]

From my untrained eye, it seems that 100 years ago it took more capital, today it takes a good idea. In other words, we've moved from capital driving success to ideas driving success, and by extension, jobs.

[Soxbadger]

From my untrained eye, it seems that 100 years ago it took more capital, today it takes a good idea. In other words, we've moved from capital driving success to ideas driving success, and by extension, jobs.

 

Not really.

 

Andrew Carnegie was an immigrant whose family had to borrow money to come to the US.

 

Back then it was ideas, now its just money and access.

[EvilMonkey]

Which is a roundabout way back to my point. For job creation, I believe we ought to be reducing taxes on the middle class and begin increasing on the wealthiest. The best bang for the buck is having a middle class spending more money.

Why do you want to punish the wealthy? They earned the money, why do you want to take it from them? Do they use the police more than everyone else? Use the roads? Forest preserves or County hospitals? Why do you want to use the tax code to punish people, because that is what you are saying there.

[Jake]

Everything creates jobs. Sometimes I hate myself because I cant remember this one economist, but basically the idea was that everything adds to the pie. That a criminal is a job creator because criminals = police, security systems, jails, judges, lawyers, etc.

 

of course....

 

that means the system will be vulnerable to changes in the amount of criminals. the "market correction" if our prison systems collapsed due to the release of a huge portion of inmate would be extremely painful

[Texsox]

Why do you want to punish the wealthy? They earned the money, why do you want to take it from them? Do they use the police more than everyone else? Use the roads? Forest preserves or County hospitals? Why do you want to use the tax code to punish people, because that is what you are saying there.

 

First of all I reject it is a punishment to live in this country and pay taxes. There are very few places on the planet that do not collect taxes, so I reject your implication that we should not tax at all. So if you agree with me that it is necessary to tax people, then the debate becomes how much to tax and in what manner. If you think we shouldn't "punish" the wealthy by collecting any taxes, then you can stop reading here, but I really doubt that is the case.

 

A few reasons why I believe we should revert back to the tax rates of twenty and thirty years ago.

 

A graduated income tax is the fairest. Money that is used for food, clothing, and shelter should not be taxed as heavy as money used for a third or fourth home, European vacations, and manicures. So higher income gets taxed more than lower income.

 

If we looked at the country that could be built and maintained based on a tax rate that just the poor and middle class could afford, we would not have the infrastructure, the military, and all those roads, forest preserves, etc. If we want a first world country, we need to collect more income than a third world country.

 

The wealth, in most cases, came from the purchases that the middle class and poor made.

[Texsox]

Everything creates jobs. Sometimes I hate myself because I cant remember this one economist, but basically the idea was that everything adds to the pie. That a criminal is a job creator because criminals = police, security systems, jails, judges, lawyers, etc.

 

Which is why the private for profit prison industry has been lobbying for tougher drug laws, and tougher immigration laws. Also why drug testing companies have invested tens of millions of dollars promoting drug testing individuals receiving government assistance.

[Y2HH]

First of all I reject it is a punishment to live in this country and pay taxes. There are very few places on the planet that do not collect taxes, so I reject your implication that we should not tax at all. So if you agree with me that it is necessary to tax people, then the debate becomes how much to tax and in what manner. If you think we shouldn't "punish" the wealthy by collecting any taxes, then you can stop reading here, but I really doubt that is the case.

 

A few reasons why I believe we should revert back to the tax rates of twenty and thirty years ago.

 

A graduated income tax is the fairest. Money that is used for food, clothing, and shelter should not be taxed as heavy as money used for a third or fourth home, European vacations, and manicures. So higher income gets taxed more than lower income.

 

If we looked at the country that could be built and maintained based on a tax rate that just the poor and middle class could afford, we would not have the infrastructure, the military, and all those roads, forest preserves, etc. If we want a first world country, we need to collect more income than a third world country.

 

The wealth, in most cases, came from the purchases that the middle class and poor made.

 

I agree with a lot of this, but the issue isn't simply federal tax...it's a combination of taxes and other fees that nickel and dime regular people. Effectively, after deductions, I pay about 7-8% federal income tax, however, if you add up all the other taxes on top of that:

 

Such as state/county/city tax, amusement tax, soda tax, city sticker tax/fees, license plate sticker tax/fees, water bills/water tax, sales tax, liquor tax, property tax, phone tax, tax on tax, etc...when all is said and done, it ends up being astronomically higher than just 7-8%. Everywhere I go, and everything I do, I'm getting taxed. Hell, I can't even drive most places without paying 5$ in tolls...they even have tolls that charge you to EXIT the f***ing highway, which feels like a f***ing entrapment scam.

 

Essentially, the way the system is set up now, we double/triple/quadruple dip (and beyond) money that's already been taxed again and again, to the point that because of how they wield the tax code from the federal all the way down to the local level, it feels like a form of punishment.

 

I'm fine with a graduated income tax, but with such an overhaul, taxes all the way down to the local level would have to be overhauled with it. It's insane how much we are taxed and most people don't even realize how much they're getting nickel and dimed, yet even local governments are beyond broke.

[Jenksismyhero]

Why do you want to punish the wealthy? They earned the money, why do you want to take it from them? Do they use the police more than everyone else? Use the roads? Forest preserves or County hospitals? Why do you want to use the tax code to punish people, because that is what you are saying there.

 

I have this same argument with my dad, who's a staunch Reagan Republican. In a perfect world, I agree with you. Income taxes are bulls***. Taxes on income you derive from your income is bulls***. It goes to pay for a lot of s*** we don't need/shouldn't have.

 

But in reality that world doesn't exist and the people who get stuck with the bill are the middle to upper middle class people out there.

[cabiness42]

A graduated income tax is the fairest. Money that is used for food, clothing, and shelter should not be taxed as heavy as money used for a third or fourth home, European vacations, and manicures. So higher income gets taxed more than lower income.

 

Or, you could just tax all the s*** that rich people spend money on. Determine an "average" family car (in my mind it's a Camry) and slap a Federal excise tax on every dollar above the price of that car. So if a new Camry costs $25K and you buy a luxury car for $65K, you pay tax on $40K. Tax property above a certain value, jewelry, hotels.

 

You can create excise taxes that are paid almost entirely by the rich, a little bit by the middle class, and none by the poor.

 

The rich people have less reason to b****, since they are choosing to make these purchases so you aren't just "taking their money". There are also less loopholes than income tax (though I'm sure people will find some).

 

[Texsox]

There are always unintended consequences. A couple requirements for a successful tax plan. Above all else, it must raise money to run the government. The problem with sin taxes, (expensive cars, boats, cigarettes, liquor) is if people stop buying those items, it eliminates jobs and doesn't raise money to run the government.

 

I agree that we have too many hidden taxes. Gasoline taxes are incredible, every tourist area tacks on surcharges for hotel rooms and rental cars (hey, who doesn't like out of towners paying extra taxes in your town?)

 

The graduated income tax is about as fair of a system as can be divised. A lesson that SS2k5 taught me years ago. the amounts and where it jumps up is the debate in my eyes.

[cabiness42]

There are always unintended consequences. A couple requirements for a successful tax plan. Above all else, it must raise money to run the government. The problem with sin taxes, (expensive cars, boats, cigarettes, liquor) is if people stop buying those items, it eliminates jobs and doesn't raise money to run the government.

 

I agree that we have too many hidden taxes. Gasoline taxes are incredible, every tourist area tacks on surcharges for hotel rooms and rental cars (hey, who doesn't like out of towners paying extra taxes in your town?)

 

The graduated income tax is about as fair of a system as can be divised. A lesson that SS2k5 taught me years ago. the amounts and where it jumps up is the debate in my eyes.

 

Rich people aren't going to stop buying cars, boats, jewelry, and vacations because they cost a few bucks more.