Wednesday, September 28, 2011

With Taxes Cut For "Job Creators," Where Are The Jobs?

One of the most absurd pieces of rhetoric that the Republicans currently use is "job creators." We can't raise taxes on the wealthy, we're told, because they use their money to "create" jobs. This argument has been used by Rep. Paul Ryan (R-WI), House Majority Leader Eric Cantor and Speaker John Boehner. It was invoked as a reason to add not one penny of revenue as part of the debt ceiling deal.

What amazes me is that the Republicans speak of "job creators" without embarrassment. The disconnect is just so obvious. If cutting taxes results in jobs, where are the jobs? Today I read about huge job losses hitting the nation's cities and the South. Two paragraphs on a Georgia city struck me:

Union City, with a population of 20,000, now calls itself the place “Where Business Meets the World” and has been trying to lure companies by pointing out its low business taxes, various incentive programs and proximity to Hartsfield-Jackson Atlanta International Airport.

Steve Rapson, the city manager, said that the challenge there, as in much of America, has been to get employers to hire again. “It’s hard to get your mind around what can you do as a city to encourage future jobs and jobs growth,” he said.

So here's a small city that has low business taxes. Why, then, is it hard to "get employers to hire again"? The answer, of course, is lack of consumer demand. If consumers are not spending, companies are not going to hire. If demand rises, hiring will rise. Jobs will not simply be "created" when cash is shoveled at the wealthy (Moody's Analytics tells us that the wealthy generally save rather than spend their tax cuts). That's why the emphasis should be on stimulus and jobs, not the deficit–and why simply cutting is disastrous. When Roosevelt cut spending in 1937, we went back into the Depression until World War II. Clinton increased taxes in 1993 and the economy boomed; Bush cut taxes in 2001, which contributed to our current mess.

So what do we get for maintaining tax cuts for the wealthy? Well, we have to cut programs for education, health, energy and jobs. What should we call it when the needs of the middle class and poor are disregarded for the sake of the wealthy? We can use another bit of rhetoric the Republicans are fond of–but I believe that we can use it more accurately. We can call it "class warfare."

(Image: David Horsey)

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