TAXES: Cuts don't create new jobs

The claim that wealthy people and corporations create more jobs when paying less in taxes is specious and is without foundation in fact. Bluntly, it is a lie. The premise is that businesses would employ more workers if they had more money.

Employment is driven by consumer demand, not the amount of money in an executive’s pocket or on a business’ balance sheet. A business or entrepreneur will not use profits to add more workers unless there is consumer or business demand for their product or service.

A sandwich shop owner hires more employees only when his shop sells more sandwiches. The lumber mill owner hires employees when the business gets more orders for lumber, not when there are profits on the balance sheet. To expect otherwise assumes naive altruism on the part of the business owner. A worker is hired to produce something people are buying.

Despite claims of tax-cut proponents, new jobs are not created by reducing taxes on businesses, nor are they created by reducing taxes on the upper-income bracket. Employment is determined by consumer demand, not by the amount of money in an executive’s pocket.

I offer the wise words of Marriner Eccles: “As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth — not of existing wealth, but of wealth as it is currently produced — to provide men with buying power equal to the amount of goods and services offered by the nation’s economic machinery.”

In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

Similarly, providing tax cuts to the wealthy only further concentrates the chips and does nothing to get the chips back into the hands of the other players.

It ain’t “GOOD TIMES” until working men and women have money in their pockets and in the bank. When will we learn that prosperity is a “WE” sort of thing?

Abraham Lincoln spoke this truth when he said “Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”

J. ALBERT ROWE

Coeur d’Alene