Wednesday, October 5, 2011

Job Creators?!?

I just don't understand. Maybe you can help me here. The Republicans/ Tea Party say -no demand- "Don't tax the Job Creators!" So the natural question is; who are the job creators? They say its everyone making over $250K per year. Really? I find that hard to believe. I see trust fund babies playing (losing) poker because they don't have anything else to do. They "make" $250K per year, so I guess they are job creators?

But why take their word for it. Why take my word for it. Why don't we implement a tax code change that solves the problem so we won't have to take anybody's word for it. Here's how it would work. If a company or individual hires one person during the tax year, they get a tax benefit of X (we could work out the specifics later). If they hire 2 people they get 2X. On the other side, if one makes more than Y (say $250K/year) and they don't hire anyone, they pay extra their normal taxes plus Z. In this way, we would be using the most powerful tool in the capitalist quiver, incentives, to help get the job market kick started.

The reality of the average corporate balance sheet is that they carry a huge amount of cash. We (the nation) need these companies to put this cash to work now. If they work the numbers and see that they can invest in people and new projects at a price that will equal doing nothing, or to at least make it incredibly advantageous to invest that money rather than sit on it, they will do it. Trust me, I went to Columbia Business School. These folks want to maximize their return. They want to look good. They'll invest it. In today's environment, they are incentivized to do nothing. The global economy is shaky. Their bosses (everyone has a boss) are nervous about risk. So they sit on it and are praised for doing so. We all love praise.

More to point - Why isn't anybody talking about this? Why do we take the Republican moniker "Job Creator" at face value? Why aren't the Democrats challenging them? I'm concerned that the men of money in corporate America are making too many of the calls. They don't want to do anything like this (due too this concept of maximization discussed above)and they have the power to smother it. Let's hope that isn't the case. Let's hope that in America, we make decisions on the basis of one person = one vote, not one dollar = one vote.

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