The Rich ≠ Job Creators

by Matt B. on August 16, 2011

The Republican Congressional leadership’s recent insistence on the phrase “job creators” to refer to top income-earners has been nagging at me, and I’ve finally figured out why:

1) It implies that all top income-earners create jobs.

2) It implies that no one else creates jobs.

3) It implies that if we want to create jobs, we can’t raise taxes on top income-earners.

But of course, none of this is true.

Plenty of top income-earners don’t create jobs – they simply take home high salaries and/or investment income. And plenty of low- and middle-income people do create jobs by starting small businesses and other enterprises.

If Republicans are serious about wanting to encourage job creation, they could offer targeted tax breaks to folks who actually create jobs, rather than treating wealthy folks as if they were all equally likely to do so. (I wish I’d thought of this point during my interview with Jeb Bush late last year.)  This would be the smart move, particularly for a party that professes to care so much about efficiency in government.

 

 

  • Lava

    More than that: low and middle income people create jobs by paying for things. Indeed, the lower your income, the higher your marginal propensity to consume, on average — meaning those folks spend more. And given that the thing holding back our economy right now is a demand problem, not a supply problem — corporations are sitting on a couple trillion dollars because there aren’t enough customers to warrant more investment — the way to create jobs is to put money in the hands of those most likely to spend it: low and middle class people. Those are the job creators.

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