Corporations do not create jobs because they get a tax break.

[kentuck]

They create jobs when there is a demand for their product. They do not create jobs just to be creating jobs. That is not why they exist.

In fact, they could get a tax break and still lay people off. Why do they keep lying about this?

[unblock]

1. In fact they focus their energies on destroying American jobs

By offshoring and/or automation. A tax cut on corporate profits actually rewards job-destroying behavior.

[kentuck]

4. That is true.

They get rewarded for destroying jobs, not creating jobs.

[burnbaby]

5. how does a tax cut

destroy jobs?

[kentuck]

8. Tax cuts at the low end could create some demand.

Tax cuts at the corporate level could create higher dividends for stockholders, or they could maintain present dividend levels and use the tax cuts to help pay for the move overseas.

[unblock]

14. Right the goal should be to increase demand, particularly local demand

Spending on poor people is the most cost effective way to do this. Poor people tend to spend it all and usually locally.

Rich people tend to save it, invest it overseas, import things from overseas, or directly spend overseas vacations, etc. this is the least effective way to stimulate the American economy.

Tax cuts for the rich only work in an environment where businesses are starved for investment capital and can't respond to existing demand. But that's a rare situation and we certainly don't have it now.

[unblock]

10. It rewards profitability by increasing after-tax income

So it could turn a mildly profitable offshoring or automation decision into a somewhat more lucrative one.

But my main point wasn't that it destroys jobs, just that it rewards the destroying of jobs that might happen regardless of the tax rate.

Actually, tax cuts themselves don't have much of an impact on job creation/destruction. What does have an effect is whether or not they are "paid for" with government spending cuts. If they are, that directly lowers demand and hurts businesses and eventually, jobs.

[burnbaby]

2. no but they leave the country

for tax breaks, so we might as well lower the corporate tax and keep them here in this country. When there is a demand for their product we will be standing in line to work

[Phoenix61]

6. No they don't

They leave for cheap labor. Payroll is typically the biggest expense for a Corp which is why manufacturing has turned to automation.

[kentuck]

7. But they do have a loophole...

where they do get a taxbreak for moving their jobs overseas.

A better solution would be to just do away with the loophole, in my opinion.

[Phoenix61]

12. They don't pay taxes on money made overseas

until they bring it back to the US. So, every couple of years they float the same shit about high taxes leading to unemployment so the fed government will grant them a tax holiday and they can bring all the money back home without paying taxes on it. The assumption being they will use it for capital expenditures which will create jobs. It has never worked that way and won't work that way this time. Think bonuses and higher dividends to investors.

[kentuck]

19. But do they have FDIC protection (taxpayer protection) if their money is stashed in Caymans?

I don't know?

[Phoenix61]

22. I wouldn't think so

FDIC insures accounts in US banks.

[burnbaby]

11. oh boy

The way most of these deals work is that a big American company buys a smaller foreign one. But then the org chart flips over: The little foreign company's headquarters become, at least on paper, the HQ of the new global company. The large American company is now a foreign one, and taxed according to that country's rules.

[kentuck]

15. How often does that happen?

I thought that was what "trade agreements" were for?

[Elwood P Dowd]

13. HP got GW Bush tax breaks and subsidies after 9-11.

What did they do? They shipped thousands of jobs to China and banked the money. The witch from hell CEO and the shareholders made out like bandits. CitiGroup did the same thing.

[HughBeaumont]

16. +1,000,000,000

Chainsaw Carly cut 14,000 jobs while performing cash-and-carry stock buybacks with her $4b from the 2004 Homeland Investment Act . . . even though such buybacks were reportedly prohibited by that Act.

Two Americas at work, folks. Nice chunk of change if you can get it.

[kentuck]

17. And the deficits exploded and the economy crashed.

Does anyone think it won't happen again? Once again, Repubs will fuck it up so badly that not even Obama can straighten it out.

[Elwood P Dowd]

20. It's going to happen much faster under this insane bunch.

It took 6 years for the Bush crowd to break the country. If Trump and the repukes can maintain total control for another 4 years and get their agenda totally in place, its just about guaranteed we're going to have another Great Depression.

[Phoenix61]

3. Because they can?

They understand people think "if I had more money to spend, I'd go buy something." Those same people assume a Corp would do the same thing. They lack a basic understanding of supply and demand economics. Ivanka's comment about if someone believes something that is false but it works to your advantage, just let it go comes to mind.

[The Velveteen Ocelot]

9. Exactly.

If I own a company that makes widgets, I will employ as many people as I need to make as many widgets as I can sell. If the demand for widgets increases I can raise the price, which will bring in the money I need to hire more workers to make more widgets to satisfy the demand. If the government decides to give me a tax break, I won't use that extra money to hire more people unless there is enough demand for my widgets to justify increasing my work force. Otherwise I'm paying people to make more widgets than I can sell, or else I'm paying people to sit around and not make widgets because I can't sell them. I could also use the extra money to buy equipment or expand my plant, which would also create a few jobs, but that still wouldn't make sense if there isn't enough demand for widgets. So I just keep the money for myself.

Econ 101, folks. Tax breaks for corporations don't create jobs.

[kentuck]

18. That cannot be said enough.

"Tax breaks for corporations don't create jobs."

[dawg]

21. Wages are 100% deductible, so ...

the income tax burden on "job creation" has always been zero.

[Hoyt]

23. If corporations have more money after taxes, they supposedly invest it or pay it out in dividends.

There is a limit to how much of that might happen and I am doubtful we'd get enough economic activity to offset the loss in tax revenues. Thus, increasing national debt. But theoretically, in certain economic circumstances, a tax cut might spur some additional business. Don't see it working right now.