That is bullshit. 100% horse cakes.
"Rich people", for the most part, by definition in terms of the SEC and private placement memorandums, are those "sophisticated" and or "accredited", or meeting the following criteria:
- a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;
- a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
When you hear the Demmy's talk about raising taxes, it's usually in terms of targeting those who meet #2 above, right? We've all heard "people with income of $250,000 gross annual or more..." etc. etc. on the news. They often equate this metric with those in the "top 1%".
In other words, "don't raise taxes on these people... that will prevent them from creating jobs!"
The truth is these people are not the "job creators". They are the "job maintainers", and, if anything, the "job eliminators", or the "offshore-ers" and "cost-cutters". They are the blue chip P's and VP's, Dr.s, lawyers, upper level management personnel, white collar Americans who have not ever "created" anything relative to a "job" for another American. They found themselves earning money through a system that was, in most cases, freely cash-flowing far earlier in time relative to when their decision-making skills argued their entrance into the coveted "top 1%". These people, on average, don't create, and, actually, for 7.5 hours out of the day, are in desperate search to destroy, or create cost-cutting initiatives. Remember... cutting costs increases profit, and an increase in profit is the #1 way to justify an increase in pay, and that is why they are breathing from 8 to 5 in their office.
People will always get cut before goods needed for the sale. Remember that.
Adding a "job" to an established business is an incredibly, extremely, expensive process and recurring burden for a company. Management cringes at the thought of the new costs that will eat EBITDA when they offer to hire. It's a real expense, and unless the market is absolutely demanding a position, will be avoided AT. ALL. COSTS. This is usually in terms of sales and demand relative to products needed in new markets. In that case, the market created the job, not the dipshit MBA with a weak LinkedIn profile. All he is going to do is assess the risk associated with a cost-benefit analysis on the new hire. 5th grade math.
Here is the harsh truth: the only way, in this case, a "job" will be created, is if demand for a company's product or service increases enough to justify a new position, and no one can control free-market demand. The opposite option is to take an "unjustified" risk, or investing in new jobs without adequate comfort those jobs will yield reward.
Companies run by these people do not do this. They get fired for doing this. Now, less taxes certainly increase available cash, but an increase in available cash does not mean patriotism trumps greed; if the market does not demand a new job, that cash, not being paid as tax, will either be 1.) retained, 2.) invested, or 3.) paid out in the form of dividends.
"Rich create jobs."
Stop believing that bullshit from the media. That's a tip of the hat toward their viewers, whose ego's are in love with the false belief they are helping struggling Americans reach the "American Dream" by paying them shit and making double-digit returns on the base-level, pre-tax labor, or g&a, expense every month they're in the black.
FALSE. FAIL. BULLSHIT. DO NOT PASS GO. TAKE A WALK.
The truth is this. Entrepreneurs create jobs. No, this is not personal bias. I will explain it detail.
Entrepreneurs are the people who notice an unmet need, or market opportunity, and create a plan to meet that need and capitalize on the opportunity. This is a natural process ancient to the world of scarcity, and specialization with talents, that we live in. I don't care if it's breaking twine in a fishing village off the Nile River or trillion dollar credit default swaps for AIG, new demand is new demand. They then, relative to a cash-based currency, or fuck even a conch shell, or pig ear, or broken shoe lace, or dirt clod based currency system, have to collect enough cash / conch shells / whatever to trade with other product and service providers essential to offering the service / manufacturing the product designed to meet that unmet need. Stronger twine, or OTC CDS servicing; meeting demand.
Now, pay close attention: the word "collect" is synonymous with today's stock market concept; spreading risk in terms of asking 1,000,000 people for $1 versus 1 person for $1,000,000. The entrepreneur, who, most of the time, cannot afford to fund his / her new idea independently, needs alot of capital. So he / she can 1.) sell stock, or 2.) issue bonds, to accomplish this goal. Once they "collect" their currency, they then do something magical:
They create jobs. They pay vendors and they hire employees with the intent to launch the idea that will meet that unmet need. This is where the "job creation" comes from; you have people who were not able to work, and not hired by the "rich", who now have a "job". A "job" has been "created".
Some of you clever folks may be anticipating my next point; "Who do you think buys the stock or bond from the entrepreneur and provides the capital for him / her to create those jobs? Those "rich" people! And taxing them reduces the money they have to buy that stock or bond and help create that job!"
Yes, an indirect way of arguing against my point. I agree, that the more money one has, the more likely they are to risk it on new things. But the "rich" have a lot of money because they "DON'T" risk it on new things.
New things are risky, and risky things can lose money, and "rich" people are good at "not" losing money. So, if we want job creation, we need to 1.) encourage, or incentivize, entrepreneurship, and 2.) encourage, or incentivize, investment in new ideas.
Oh, and revert to the early 1900's definition of a "corporation", including all limited rights originally assigned to the "Inc.". BIG factor in the "rich getting richer and the poor getting poorer" (watch documentary "The Corporation" http://thecorporation.com/)
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