What Conservatives Won’t Tell You: Higher Taxes Equal Reinvestment And Jobs

Sep 20 2011 Published by under Uncategorized

The debate over whether or not to raise taxes on corporate America is about to get a little tense. President Obama laid down his proposal in a steadfast speech yesterday at the White House. He called out Speaker John Boehner by name regarding his inability to compromise even though he called for compromise.

Also we had Congressman John Flemming (R-LA) complaining that he only had four hundred thousand dollars left over after using two hundred thousand to feed his family.

What the conservatives do not know or don’t reveal is, higher taxes make businesses re-invest most of their profits into the corporation. Let’s take Congressman Flemming for example, the 400K dollars he has after feeding his family. If he buys another building to expand, or buys a new stove to cook his sandwiches, that 400k is no longer taxable.

His reinvestment creates more jobs. It puts construction guys on the job, or stove manufacturers back on the line etc.

What conservatives never tell you is the only reason a business like Congressman Flemming owns hires a person to make sandwiches or work in his UPS store is if there are customers. If there aren’t any customers, he doesn’t hire, and if his business realizes a drop in customers he may even get rid of some of his employees.

This is one of the reasons President Clinton had a booming economy. He raised taxes on the wealthy. Rather than pay the higher tax rate by extracting profits for personal use and having it sit on the sidelines, they re-invested it, creating a chain reaction of jobs.

What we are seeing today is lower taxes leading to owners extracting money rather than reinvesting it. The cash sits on the sidelines in bank accounts, or in their wallets. So let’s raise taxes, and “force” this idle cash back into businesses for reinvestment and create the jobs this country needs.

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