Rich capitalist opposes tax-cuts for the wealthy

[Haruo]

I found this TED video by Seattle entrepreneur and self-described capitalist refreshing: . And I think for the most part he is right in his analysis of what's wrong with the economic thinking of those Republicrats who are not actually mean, mean-spirited, or particularly selfish.

[Cathy]

I enjoyed the video. It has always made sense to me that those who spend a higher percentage of the money they get actually do more to support the economy and growth.

[ET]

A few problems with his line of thinking, Haruo. For the most part I found it to be a VERY weak presentation, and here's some reasons:

Yes, there are aspects of "chicken and the egg" in such an economic debate, but to say that "consumers create jobs" is backwards. They may sustain it and cause the jobs to grow once the business gets going, but when Fred Smith started Federal Express back in the 70s, there wasn't a line of consumers at the door saying "we need this letter shipped overnight, so here's some money and go out and start an airline to fly it across the country". No, he had to acquire a rather large sum of money - which he didn't get from the middle-class - to buy airplanes and get the business going.

My best friend in high school started a web development company in the latter part of 1999 - unfortunately for him, right before the dot com bubble burst. When he started his company, he hired 7-10 people with money he got from a "rich" guy who provided some money in the low 7-digit range. Sure, he needed customers to keep it going, but while starting up he needed money from someone other that customers because they couldn't provide the pile of cash needed to get the thing off the ground.

The unemployment vs tax rate chart is problematic also. It's a dual-axis chart where the number scale skews everything. His chart shows an almost steady increase in unemployment corresponding to a steady decline in tax rates on the rich. Yet, according to the Bureau of Labor Statistics, unemployment was around 5.5% in 1995, dropped to a little bit under 4% by 2001, rose to a little over 6% by 2003, dropped again down to about 4.5% by 2007 and then shot up to almost 10% in 2009/2010 and is a bit over 8% today. Those swings are hardly reflected in that graph. It looks more like they put 5.5% as one data point and then 9.3% as the endpoint and drew a straight line between them with just a few squiggles to make it not look so obvious.

My MAJOR point of contention would be that I find it contradictory and illogical to say that "the rich" can't spend enough money to create jobs, but government can tax them enough to create jobs. ( ). Going back to a some time back, Obama and Dem's desire to eliminate "Bush's tax cuts for the rich" would raise $700 billion over 10 years. That translates into an increased revenue stream of $70 billion a year when the federal budget is currently at $3.7 TRILLION, a 1.89% revenue increase for the budget.

If we divide that revenue increase amongst every American and assume that such money would be "invested" ( ) with 100% efficiency to the benefit of "99%" of Americans, then a family of four would have maybe another $100 a month in "benefits", either directly or indirectly. I hate to tell you, but an "investment" of $100 a month might be nice, but when my family of 5 can easily run up a dinner tab of $60-80 just going out to eat at Chili's or some other restaurant like that, an extra $100 a month ain't gonna change our lives.

Given government "efficiency", that number would probably be more like $25 or $30 after all the bureaucrats were paid and another chunk ended up in the pork barrel before finally making it down to the rest of us.

Now, if anybody wants to tell me that a 1.89% increase in salary is going to rock their world and put them on the road to riches, I'll be glad to hear the argument, but if a 1.89% increase in your salary isn't going financially change your life, how in the do you expect me to believe that a 1.89% increase in government spending is going to change the course of an entire nation?

[Gene Scarborough]

Theory is just that = theory!!!!

Trickle Down is a total bust! How many years does it take to admit the falacy?

Why don't we just stop income tax for a year. Let people spend their money as they see fit. Enough goes to the state and local entities with sales tax and fuel tax.

All we are doing is keeping a bunch of tax accountants and tax lawyers in fine style finding loopholes created by loopie bureaucrats earning far more than they are worth to us!!! The tax form is a mystery we don't even need.

Stop any payment to any representative and make them return to the concept of the Founding Fathers---that citizens represent citizens as a return for their success in a competitive capitalist society. Forbid any Lawyer to serve to make his buddies back home rich dealing with the vageries of their laws

[KeithE]

I’m reading a book co-authored by Nick Hanauer and will comment after reading the book (it’s short) and watching the video.

[Matto]

I thought this was interesting as an opposing idea.

http://www.youtube.com/watch?v=hWp02zFT ... ata_player

[Matto]