The problem is not so much the taxes or the cuts as it is the fact that business is not growing because people are not spending. Companies are not going to take risks like expansion in a market that can't make up it's mind on which direction it is going, and especially when it is heading in the wrong direction. No amount of molesting the tax code is going to fix that problem. None of this was a problem until it cost people $4 a gallon to put gas in their cars.
When Eisenhower was president, the highest tax rate was 90%, and unemployment was low. No, I am not suggesting that we tax at 90% again. I just brought up this fact to show the lie that is being passed around that it is tax cuts that create jobs. Jobs are created when people buy stuff, and when the middle class is squeezed more than the rich, they buy less, and fewer jobs are created as a result. It's all about supply and demand. What can kill demand, and therefore jobs? Greed.
I'm glad a couple of people here get it. As I stated in post #152, America ceased using manufacturing as a profit base and started relying heavily on financial services. As such, credit consumption propped up stagnant wages practically forcing middle-class Americans to depend on credit just to make ends. We borrowed from our "personal equity fund" - our homes - and/or maxed out our credit cards just to buy the things we needed just to get through life - fuel for our cars, food, health care/insurance, daycare, banking services, home heating (utilities). All the while the cost of these such things got more and more expensive. If it was difficult for a two-income househood to make ends meet it became increasingly difficult if one of those wage earners lost their job. That's a reality in good times, but the problem is made worse in a down economy.
I'm sure there will be plenty of people here who will say, "Well, they should have been more responsible with their money," and to that I'd say you're right - to a degree. You see, there's two-sides to this credit consumption story. On the one hand, it became the norm. America, through the financial industry itself, effectively "forced" credit unto us all. Sure, a business will readily accept cash for goods and services, but when wages remain flat for so long yet the cost of goods and services continue to increase it becomes difficult for a waitress, a daycare worker, a data entry clerk, an auto mechanic, a landscaper - just our average ordinary blue-collar worker - to accumulate disposable income in large enough quatities to do anything other than pay the mortgage or other basic necessities just to survive. For many, using the credit card to bridge that income gap became commonplace. We got use to it to where now most of us are like prisoner with a number only that number is our credit rating.
yet the effective top rate wasn't much different due to all the breaks, loopholes etc and that top rate applied to far less people and was justified in paying off a massive war.
we also were the only industrial power left standing after WWII
IS there anyone out there who suggests TAX HIKES create jobs? That is the main issue
This is where the argument gets very convoluted. Tax increases wouldn't go to create jobs. They'd go towards paying down the national debt, as well as paying for those things our government has always paid for - our military, Medicaid, unfunded portions of Medicare, etc., etc. If Corporate America truly saw tax increases as a threat to their profitability they'd do the exact opposite of the conservative argument: they'd use their net profits and put them back into their business and advertise like hell to generate sales in order to capture more marketshare. It's a survivor's mentality in business. But there's a catch: no matter how much a company advertises to find new customers, unless customers have disposable income to spend, the demand will never be there. You can't keep dipping from the same well when it's been practically runs dry. That's the situation most Americans find themselves in right now. If you're lucky enough to still have a job chances are you've cut back on damned near e-v-e-r-y-t-h-i-n-g just to make ends meet. You're likely just one unfortunate, unexpected event away from going "Ah, ****!!!!"
As for the tax rate during the WWII-era and now, we could have done the exact same thing for both the War in Iraq and the War in Afghanistan, but...
Maybe if we had done so our deficit wouldn't be so freakin' outrageous today. War bonds and recycling drives anyone? Instead, we got "go out and shop, America! Keep consumerism going!" Gotta prop up the financial sector only to be screwed later by corporate greed. And what has working-class Americans received for their "generocity" of a massive private sector bailout? No jobs and generation-worth of IOUs. Where's the gratitude, Corporate America?
