The Real Job Creators are Poor

To justify the Republican's objection to taxing the wealthy, when Bloomberg’s Al Hunt asked Representative Fred Upton (R-MI) to explain why the Bush tax cuts didn't create jobs, Upton admitted that “I don’t know specifically the answer to that question.”

CAP's Director of Tax and Budget Policy Michael Linden found, “in the past 60 years, job growth has actually been greater in years when the top income tax rate was much higher than it is now. In fact, if you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher.”

Today the tax rates are actually at historical lows. The GOP, as Fred Upton displayed, simply has no explanation for these facts.

Since the days of the Bush breaks in 2001 and 2003, Republicans consistently have said that tax reductions stimulate the economy and the lost revenue needn't be offset. Jon Kyl (R-AZ), the #2 Senate Republican, asserted, for example: "You should never have to offset the cost of a deliberate decision to reduce tax rates on Americans.

He says "Americans". Not rich Americans, or the richest of the richest Americans, or the top 1% of Americans. Just Americans, as though we're all financially equal.

The GOP didn't pay for the Bush tax cuts, a decision that dramatically increased the deficit, which Republicans now say the 99% must pay by suffering slashed government services.

Rather than answering to the PEOPLE, the Republicans have loyally upheld their solemn pledge to lobbyist Grover Norquist to never, ever raise taxes. Last year, for example, they GOP refused to allow the Bush tax cuts to expire, contending that would be a tax increase, not the end of tax rates that were intended to be temporary.

Nick Hanauer, a venture capitalist writing an op-ed piece for Bloomberg, says, "The conventional wisdom that the rich and businesses are our nation’s 'job creators' is every bit false. I’ve never been a 'job creator'. I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate. When businesspeople take credit for creating jobs, it is like squirrels taking credit for creating evolution. In fact, it’s the other way around."

"Let’s give a break to the true job creators. Let’s tax the rich like we once did and use that money to spur growth by putting purchasing power back in the hands of the middle class. And let’s remember that capitalists without customers are out of business."

And the REAL job creators in America are either poor, unemployed, under-employed, part-time workers, or under-paid. And of those with jobs, 50% of all American workers earned less than $27,000 a year when the poverty line for a family of four was $22,314.

What have we all be saying for all these years? The Bush tax cuts just let people and corporations hoard money (over $2.2 trillion just in corporate off-shore banks accounts alone, not including personal off-shore accounts to avoid taxes). Taxing them is the only way we can circulate the money supply. Or, as the Republicans like to accuse us of, "redistributing the wealth", rather than concentrating it all at the very top.

The Bush tax breaks cut the capital gains tax to a tax rate lower than that on a true middle class income. (The rich primarily make most their money from "capital gains".)

Last week, Republicans found themselves confronted with a choice between raising taxes on the 99% or on the 1%. So far, millionaires and billionaires the greedy gluttons the ultra-rich the humble "job creators" have been spared.

My Related Posts:

• Subsidies for the Rich and Famous
• It's not Class Warfare, it's just "Business"
• Historical Tax Rates on the Rich (1862 to 2011)
• The Second Gilded Age: History Repeats Itself
• Mellon: The Banker Who Rigged the U.S. Tax Code
• The GOP Tax Plan - Ignorance, Insanity, or Greed?
• We have a Revenue Problem, Not A Spending Problem
• 280 Corporations are "Too Big to Tax"
• Trickle-Down Economics: The Cruel 30-Year Hoax
• You Pay Hidden Entitlements for the Rich
• Record Profits + Record Bonuses = Zero Jobs
• Low Wages Kills Jobs, Not High Taxes

Other Related Articles

• "The richest 1 percent have more financial wealth than the bottom 95 percent combined."
• The total net worth on the Forbes 400 List marks $1.5 Trillion in 2011
• The Global Super-Rich Stash: Now $25 Trillion
• Historical Tax Rates and Time-line
• Capital gains from Citizens for Tax Justice
• 1977 - 2007 tax rates from U.S. Treasury
• Economic Policy Institute on capital gains taxes
• Capital gains explained from U.S. Internal Revenue Service
• The great corporate tax scam

NYC Mayor Michael Bloomberg: "I don't like class warfare."

Mayor Bloomberg, who is worth $20 billion and is #9 on the Forbes 400 list, is deathly afraid of having a class war with people like me - - - someone who subsists of food stamps and had ZERO for an income in all of 2011.

Why is he afraid? Because I have a weapon in my arsenal that can defeat wealthy and powerful people like him. It's called a vote, and I can vote for people who will raise his taxes.

It's the only weapon I have at my disposal that can hurt them the most, by hitting them in their wallet.

Fox News, the Tea Party, and the right-wing accuse people like me of wanting to "fleece" innovative business owners and job creators, and says "the looter class demonizes the wealthy", and they equate fair taxation to socialism. They say "If you punish the wealthy, the risk-takers, the innovators, you kill the goose that lays the golden eggs."

Oh really? The top marginal tax rate during the 1950s was 91% (today they're 35%). During the 1950s corporate taxes were 52% (today they're 35%). And back in the 1950s the capital gains taxes were 25% (today they're 15%). Didn't we innovate and have jobs back then? (READ: America and taxes during the Fabulous Fifties)

I submit, it it THEY and the large corporations who have been doing all the fleecing.

If this were really true, that people like Mayor Bloomberg didn't want a class war, then why is it that the rich have been waging class war on the middle-class and poor for the past 40 years?

Poor people can't wage a class war, they don't have the resources. And they are forced to spend most of their time and energy on just trying to survive. Their only weapon in a class war might be a cardboard protest sign.

But the uber-wealthy, large corporations, and big banks have all the financial resources at their disposal to wage any kind of war they wish, especially if profits are involved. They control everything from the media to the food chain. How can poor people wage a class war against them? By refusing to pay $5 ATM fees? That's a pretty pathetic war plan.

So then, why do the rich keep crying about "class warfare"?

Simple. The best defense against a class war that's being waged against the poor (by the rich) is to raise their taxes. And they know this, that's why their strategy has been to call themselves "job creators", and to claim that they can't create jobs if you tax them more - - even though they've already had some of the most historically lowest tax rates for the past ten years (since the Bush tax cuts).

Mayor Bloomberg was on MSNBC this morning and said we should just let the Bush tax cuts expire...for EVERYBODY (not just for the rich). He said there were two reasons why he feels this way:

1. It's fair, because he doesn't like class warfare.
2. Politically, it's the only chance of getting it done (by just letting the Bust tax cuts expire)

Bloomberg is an ass on # 1 but he may be right on # 2. Last year the Republicans wouldn't fund unemployment benefits for 1 year unless the Bush tax cuts were extended for 2 more years.

The Bush tax cuts have benefited the wealthy far much more, because the capital gains tax was lowered from 20% to 15% - - - and stock trades and stock options in CEO salaries is where they earn the bulk of their personal earnings.

The Bush tax cuts has been a huge windfall for them since 2003. But Mayor Bloomberg also thinks we should lower corporate taxes too (which is bullshit, since they don't pay them now as it is, because of all the loopholes they use. (See: How Corporate Tax Dodgers Hoarded $2 Trillion).

Although the corporate tax rate is currently 35%, the largest and most profitable U.S. corporations have actually been paying only 18.5% of their profits to Uncle Sam. By comparison, in 1969, the year we sent astronauts to the Moon, the tax rate for corporations was 52.8%, and there were not as many loopholes. America was flourishing and people were working then.

In 1977 the capital gains tax was the highest in history at 49%. Today at 15% they are the lowest in history, and they have been this low since 2003. Republicans like Newt Gingrich wants this rate to be 0% and Herman Cain wants it to be 9% with his 9-9-9 Plan.

EXAMPLE: As Freddie Mac’s CEO, Ed Haldeman received a base salary of $900,000 last year and garnered a $2.3 million bonus from stock options. His tax bracket is 35% on his base salary after the first $379,150 but his Social Security and Medicare taxes are capped on the first $106,800 - which equates to 11.86% of his base salary. Most people in the U.S. earn less than $106,800 a year so we pay these taxes on 100% of our wages. If you earned between $34,500 and $83,600 a year in wages or salary, your federal income tax rate is 25%. But CEO Haldman, who received a $2.3 million bonus, only paid a tax of 15% in capital gains tax on these earnings, and he paid ZERO in Social Security and Medicare taxes. This is how ALL corporate CEOs (and Mayor Bloomberg, Warren Buffet, and Herman Cain) pay a vastly lower amount in taxes as a percentage on their total personal income, than do average working Americans who are only earning a median wage of $41,673.

Some people (usually Republicans) are arguing that high corporate taxes are keeping "job creators" from creating jobs. That is simply not true. They're creating jobs overseas because they are saving themselves a fortune in payroll and healthcare costs by using cheap exploited labor overseas. This savings is then directly funneled into the CEOs salaries through stock options, which they only pay a 15% capital gains tax on. (See: It's Not Regulation or Taxes, it's Cheap Labor Stupid!)

One of the greatest detriments to job creation in the U.S. is the overseas income deferral law. This unbelievable gift to multi-national corporations is at the heart of free trade, globalization, off-shoring and outsourcing. Presently these corporations are sitting on $2.2 trillion in untaxed profits in offshore banks to dodge taxes.

Currently in the congressional Super Committee the Republicans are offering $30 billion a year in new revenues, which is peanuts because it's only a one fifth of 1% raise. And of course you know that in exchange for that, they'll also want 10 times more than that in reductions to Social Security and Medicare.

The Republicans would rather allow corporations to hoard cash overseas, than to collect taxes from them to create government jobs and fund our entitlement programs. The CEOs would rather pay themselves another few millions dollars a year and continue to pay $1 an hour for child labor in sweatshops. Unpatriotic CEOs and Republicans would rather let the country fall into ruin, rather than have millionaires and billionaires pay their fair share of taxes on their corporate profits.

It's THEY who have waged class war on US! They haven't paid their fair share of taxes for decades! They've been fleecing record profits and record salaries for years, and yet STILL they're whining, "Class warfare! Class warfare!!"

When is enough ever too much?

Low Corporate Taxes = Excessive CEO Salaries It doesn't matter what a corporation pays in taxes as compared to GDP, or how it's compared to any other index of measure (to skew the numbers), it's what they actually pay to the U.S. Treasury after loopholes (aka "deductions") that matters most. And for the last 25 years corporations have actually paid historically low taxes. While today some corporations may have paid the maximum rate of 35% (when it was over 50% in the 1950s), many others paid ZERO, with the average being only 18%. The same can be said for their CEOs and other high-income earners. While although the top bracket is also almost historically low (at 35%, when it was once over 90%), what they actually pay is nearer to 15% because the majority of their income is earned through capital gains. And because corporations have been paying a low effective corporate tax rate for decades, that didn't keep them from outsourcing jobs overseas for cheap labor, but rather, it did enable them to pay very excessive CEO salaries...who only mostly pay 15% in federal income taxes on their capital gains.

Tax Rates during the Fabulous Fifties
http://bud-meyers.blogspot.com/2011/11/tax-rates-during-fabulous-fifties.html

Historical Tax Rates on the Rich from 1862 to 2011
http://bud-meyers.blogspot.com/2011/11/historical-tax-rates-on-rich-1862-to.html

How Corporate Tax Dodgers Hoarded $2 Trillion
http://bud-meyers.blogspot.com/2011/11/how-corporate-tax-dodgers-hoarded-2.html

I don't envy the 1% for Flying High

Not far from where I live in Las Vegas is the Henderson Executive Airport, where this week, private jets were parked for the annual National Business Aviation Association convention.

The private luxury jet business (discreetly referred to as "the business aviation industry") is dominated by American manufacturers, and will sell about $230 billion in new "business" jets over the next 10 years, according to a forecast by Honeywell Aerospace that was released at the convention. This year manufacturers will deliver 600 to 650 new business jets (and that doesn't include all the new and pre-owned jets "the 1 percenters" already own.)

Don't get me wrong, despite what wealthy Republicans, Fox News, and their corporate sponsors say, I don't envy the rich, and I really don't envy them their private jets. I don't fly often and would have no use for a private jet. So long as they don't fly too low and blast me with a sonic BOOM while I'm watching TV, they can tour the friendly skies all they want. I really don't give a damn. So long as the people inside pay their fair share of taxes.

It's usually rich people who have what's called "yacht envy" - and they usually envy others who are richer than they are. Most of the time, poor people don't envy rich people at all. Rich people just assume they do because they themselves know envy, and it's the only reason they can think of for us wanting to tax them the same as us.

While many of us may aspire to be rich ourselves, or dream and fantasize about it, we don't hate others who are. No, it's only when the one percenters deprive us of the basic necessities to live, drive us into abject poverty, criticize us and call us names, and look down their noses at us or squash us like we were just insignificant bugs, do I resent them. But I certainly don't envy them. And maybe the wealthy Republicans, Fox News, and their corporate sponsors realize this, and only use the argument of "envy" and "class war" as just lame excuses to justify not having to pay their fair share of taxes...just to be richer still.

But, getting back to the private luxury jet business...

Like many other high-end items for sale during this recession (for what's been an economic disaster for the working-class and poor) the richest 1% never suffered, so the top luxury niche of private jets is also doing very well -- helped in part by sharply increased foreign sales, particularly in Asia, Brazil and the Middle East; and also for more long-range international travel by domestic companies. The market for the biggest, most expensive business jets has remained strong. The 1% never even got a scratch, during this, or any other recession for that matter. Their standard of living wasn't affected. They kept their lights on and didn't have to forgo luxuries such as cable TV or pizza deliveries.

In the last few years large cabin jets have been selling robustly, and will represent about 25 percent of projected sales through 2011. For some companies with far-flung business (such as in China were iPhones are made for wages paying $1 an hour) a large cabin long-range plane allows a group of corporate suits to travel in speed and luxury. The one-percenters, as Masters of the Universe, can ride their magic carpets in style and comfort.

Some of the most magnificent corporate jets were on display at the convention, held on 630,000 square feet of space at Henderson Executive Airport, where convention-goers are able to wander around the planes and even through them.

There were 90 planes, but the star of the show was the new Gulfstream G650, which can fly close to the speed of sound, has a range of 7,000 miles, and can fly as high as 51,000 feet. “Think of it as having the sky to yourself,” Gulfstream ads say. (Read the specs here and download the brochure.)

If you want to peek inside the Gulfstream at the convention, you'll have to first make a reservation.

Gulfstream has added 1,300 jobs this year because high-end luxury jets are in high demand, and it has orders for that plane that extend into 2017, and announced at the convention that it expected to deliver the first 10 or 12 next year. The price tag for each one is $64.5 million - but if you're on a tight budget, you can buy other pre-owned models ranging from $14 to $40 million.

ALSO: The Boeing V.I.P. line includes a private version of the new 787 Dreamliner ($178.2 million, plus cabin outfitting starting at $80 million). Or how about your own private 747? Boeing can put you in one for about $299.5 million. (Cabin outfitting starts at $140 million). This big boy (pictured below) might come in handy when a whole group of one percenters might want to party like it's 1929.

And with a tax break and corporate welfare, any of these babies are a real bargain! And the 1% won't even have to worry about having a yacht repossessed or having their mansion foreclosed on. The 1% are truly blessed and flying high!

But I don't envy them because, with God's blessing, I won't be the one who's going to Hell.