Photo: yachtfanIn 1990, we imposed a sales tax on yachts, which was quickly repealed. One argument made by business groups supporting repeal was that the tax hurt workers who manufacture yachts. That’s correct: assuming that the yacht industry is fairly competitive, the incidence of that tax was on buyers and on yacht sales, and thus indirectly on shipbuilding employment.
The altruism of yacht-buyers towards shipyard workers has now been surpassed by those arguing for an extension of the Bush tax cuts of 2001 for the very well-to-do (family income above $250,000, probably the top 2 percent of taxpayers), scheduled to expire on December 31. A recent objection is that, by reducing net incomes of the rich, failing to extend this tax cut would reduce job creation, placing a burden on working-class families. True, but if we are concerned about job creation, are tax cuts for the rich target-effective? A general rule should be: beware of spokespeople for business seeking help for the rich in order to help workers!
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Is there going to be anything said about this? Any information on the topic? Are there any studies or research or anything you could point to which might illuminate whether or not the claim mentioned is valid or not?
Anything??
“True, but if we are concerned about job creation, are tax cuts for the rich target-effective?”
I’d like to see a post that answers this question, rather than restating the title of the post in the second to last sentence.
Any data? Any facts? You added NOTHING of value to the debate. “Beware of spokespeople?!?!” That is it?
Mr. Hamermesh, as a person seeking employment I object to this column. The tax cuts represent several major tipping points for our nation – will we recover from this economy and what type of nation will we be? Do we help more with less taxes as some say? I came to your article seeking data to inform my opinion in the debate. Instead, I found innuendo.
Trickle down economics has always struck me as completely nonsensical. Money trickles up much more rapidly than it trickles down. If we give (probably in the in the form of lower taxes) more money to rich people, they will invest most of it. Maybe in the long term that will lead to new jobs, but that’s a slow process. If we give (in the form of unemplyoment, jobs programs, etc.) more money to poor people, they will go out and spend it at say, Walmart. Guess what: Walmart is owned mostly by wealthy people: so they get that money anyway, and probably invest most of it. So by giving money to poor people we’ve increased both demand and investment, whereas if we give money to rich people we increase only investment. In the mean time, by giving money to poor people, we’ve alleviated a lot of human suffering that we would not have alleviated if we just gave it to rich people.
If the claims that tax-cuts for the rich improve the chances
of job creation were true, the United States would have a permanent low unemployment rate.
DanInesanto- yes- live on the planet or pick up a history book- tax cuts for the rich increase startification and therefore decrease social justice- you can check out the gini coefficient for the empirical framework, but i would simply ponder the question: why has us stratification increased since the 50′s (very high marginal tax increases), or, what’s the difference between the french economy and haiti
It will depend on the industry and on the rich behavior. If the rich only saves money, it will not help that much (one of Japan’s problems).
If he spends in ultra-luxury goods that are expensive but not work intensive, it will make little sense too.
The equation is if this money goes from rich to the Government, who will generate more benefits to the poor?
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How about we just implement a flat tax and call it a day?