Taxes, Rent Seeking and Job Creation
Posted by Ridgerunner 11 years, 11 months ago to Economics
The last few weeks have shown America can expect another protracted battle of wills on Capital Hill, with neither side conceding, especially on the issue of taxes.
Republicans claim raising taxes on the upper 2% will kill job creation. Democrats claim letting taxes rise on the middle class will push us into a new recession.
I take a level of exception that raising taxes on the upper 2% will kill job creation. A goodly number of individuals in this bracket are in private equity, money management, and investment. While finance is a legitimate industry, one that keep the gears of capitalism lubricated, a lot of its jobs do not create anything tangible and are more about rent seeking through the collection of fees.
While the right answer to job creation is freeing the market of excess drag, this question of taxes isn't going away soon. How does the community feel, and is there a right answer grounded in current economic fact, than pure ideology?
Republicans claim raising taxes on the upper 2% will kill job creation. Democrats claim letting taxes rise on the middle class will push us into a new recession.
I take a level of exception that raising taxes on the upper 2% will kill job creation. A goodly number of individuals in this bracket are in private equity, money management, and investment. While finance is a legitimate industry, one that keep the gears of capitalism lubricated, a lot of its jobs do not create anything tangible and are more about rent seeking through the collection of fees.
While the right answer to job creation is freeing the market of excess drag, this question of taxes isn't going away soon. How does the community feel, and is there a right answer grounded in current economic fact, than pure ideology?
The more the gubbermint taxes job creation, the fewer jobs will be created. This isn't ideology, it's mathematics. Raise the cost of raisins and fewer people will buy raisins, raise the cost (and confiscate the rewards) of employing people, and fewer job creators will take the risks to create jobs.
As a job creator of sorts myself, with around 200 employees, I can tell you that even though I haven't withdrawn myself from job creation, the fact that the gubbermint taxes away money that I would otherwise be spending on expansion has tangibly reduced by ability to create jobs by about 10 per year for the last 5 years.
You seemingly overstate the impact of the (relatively few) money management types. Most of "the rich" for tax purposes are snall businesses that are taxed at the personal rate (S Corps, LLCs, etc) and these are the businesses where most job creation takes place.