The rallying cry of most conservatives these days is that we don't want to raise taxes on the "job creators". I mean, that was the point of Bush tax cuts right? But where are the jobs, then?
I actually think we have our logic wrong. We assume that lowering taxes on the wealthy will spur economic development because the wealthy then have extra income to invest in the economy, either by buying goods and services, or by growing the businesses that made them wealthy in the first place. But, everything that's happened in the last decade makes me think this doesn't actually work.
I don't know where the tax break money is going. I suspect it's going to Wall Street -- my irritation with which is it's own post entirely. What we can say, however, that the tax break money isn't building roads or paying soldier salaries.
So, let's consider the alternative for a moment, which is higher taxes on the wealthy; something more in line with what we had in the 80s and 90s. If I'm wealthy, and I know that I'm going to lose a portion of my income every year in taxes, how am I going to protect my wealth? I'm probably going to do the typical things, like look for tax shelter and loopholes, but isn't one of the best ways to perpetuate my wealth to re-invest in my own company? If my business is bigger next year than it was last year, isn't that the best way to ensure my continued wealth? Re-investment is probably one of the biggest and most effective tax breaks of all. Giving an actual tax break really just creates more disposable income. Which, in the hands of someone who already has all their needs met, provides little ancillary benefit.
I don't know, maybe I'm out there. Kinda makes sense to me though. And I actually found out that there are groups of the wealthy that feel the same way:
"Our country faces a choice – we can pay our debts and build for the future, or we can shirk our financial responsibilities and cripple our nation’s potential.
Our country has been good to us. It provided a foundation through which we could succeed. Now, we want to do our part to keep that foundation strong so that others can succeed as we have.
Please do the right thing for our country. Raise our taxes."
