Taxing the Rich Will Hurt the Economy? Baloney!

It is total hogwash that it affects small business investing!

by Jack Lohman / November 6th, 2010

Let’s make this real simple.

I was a small business owner for 25 years. If I wanted to add more jobs or invest in new technology, I did it with pre-tax corporate dollars, not by taking an enormous salary that would be taxed. I screwed the taxman by investing company dollars rather than personal dollars. End of story.

The argument today that taxing the rich will hurt job growth and the economy is pure BS. It will only hurt the economy of the rich guys who got huge salaries and don’t want to give any of it to the government.

It might cost the making of one or two yachts, but tax increases on the wealthy will do more good than bad.

I don’t blame them, though. They’ve seen how the politicians can bargain their taxes away, giving subsidies to other wealthy guys who help fund their elections. Bribery, yes! Get payola out of the system and see where government settles.

Small businesses are not investing or hiring because the politicians have destroyed demand for product by fostering the outsourcing of jobs of the people who once bought that product. The politicians were paid via campaign bribes to pass bills like NAFTA and CAFTA, and the country now must pay the price.

Companies who would not themselves tolerate such a conflict of interest internally, are more than happy to have politicians on their payroll externally.

So the rich guys give cash bribes to politicians to stand in front of the camera and lie about the need for them to keep their money, and then the Pols vote for tax cuts in congress. All while the real small businessmen that create jobs worry about keeping their companies afloat.

What else would you expect from a corrupt political system?

Jack Lohman is a retired business owner from Colgate, WI and author of Politicians - Owned and Operated by Corporate America. He is publisher of MoneyedPoliticians.net and can be reached at: jelohman@gmail.com. Read other articles by Jack.

This article was posted on Saturday, November 6th, 2010 at 7:00am and is filed under Classism, General.

2 comments on this article so far ...

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  1. Deadbeat said on November 6th, 2010 at 7:03pm #

    While I agree with Mr. Lohman premise this notion that small business “creates jobs” falls into the category of axioms, bromides, and cliches. It is so often repeated that people take it as sacrosanct without exploring the real meaning of the rhetoric.

    What a “job” mean?

    A job means to rent out your labor power to someone who will exploit it for their own gain in exchange to be legally cheated in order to make someone else rich in order to receive the money you need for your own sustenance. It is a GROSSLY and immorally unfair arrangement that benefits the capitalist class.

    Only due to minimum wage laws, the employer is obligated to pay you at least that much. But having a “job” doesn’t guarantee meeting your basic needs. It just guarantees your exploitation especially since wages of many “jobs” have been eroded.

    However Mr. Lohman is correct to point out that small business (or the petite bourgeois) creates jobs when there is labor demand (notice how people’s demand actually create the jobs). Thus small businesses are extremely dependent on larger capital to be “trickled” onto the economy and into the hands of labor. Small business then becomes the “support” of labor demand not the other way around as is implied by the job “creation” rhetoric.

    The real question is how is capital supplied to labor that then CREATES the demand? In the U.S. that can only happen via government spending. Unfortunately government spending due to ideological limitation must be done indirectly through “private” individuals (aka “entrepreneurs”) who them siphon off a disproportionate share of the government’s largess before any real money trickles down to workers who while waiting for the tinkle down find themselves taking on debts in order to make ends meet. By the time they do get their wages a large amount is confiscated via regressive taxes and other FIRE and LEAP sector payments that absorb much of their income.

    As David Harvey demands “we have an absolute duty to change our mode of thinking”. Neither “free market” Capitalism nor Keynesian economics will pull us out of this crisis. Our whole relationship which commodities (money) and power (political economy) really needs to be rethought.

  2. hayate said on November 7th, 2010 at 2:49am #

    From the pov of a worker, whether one is being exploited by a “small” company or a “large” one is moot. It’s like asking a woman whether she prefers being raped by a tall or short man. The problem with american “labour” is that it is coerced labour. Most people have little choice other than to put up with being wage slaves with literally no control over their own lives while at work, and increasingly less control over their own lives while away from work.

    BTW, great comment, Deadbeat.