Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member Latest Breaking News Editorials & Other Articles General Discussion The DU Lounge All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search

The Velveteen Ocelot

(130,805 posts)
9. Exactly.
Wed Apr 26, 2017, 02:09 PM
Apr 2017

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.

Recommendations

0 members have recommended this reply (displayed in chronological order):

In fact they focus their energies on destroying American jobs unblock Apr 2017 #1
That is true. kentuck Apr 2017 #4
how does a tax cut burnbaby Apr 2017 #5
Tax cuts at the low end could create some demand. kentuck Apr 2017 #8
Right the goal should be to increase demand, particularly local demand unblock Apr 2017 #14
It rewards profitability by increasing after-tax income unblock Apr 2017 #10
no but they leave the country burnbaby Apr 2017 #2
No they don't Phoenix61 Apr 2017 #6
But they do have a loophole... kentuck Apr 2017 #7
They don't pay taxes on money made overseas Phoenix61 Apr 2017 #12
But do they have FDIC protection (taxpayer protection) if their money is stashed in Caymans? kentuck Apr 2017 #19
I wouldn't think so Phoenix61 Apr 2017 #22
oh boy burnbaby Apr 2017 #11
How often does that happen? kentuck Apr 2017 #15
HP got GW Bush tax breaks and subsidies after 9-11. Elwood P Dowd Apr 2017 #13
+1,000,000,000 HughBeaumont Apr 2017 #16
And the deficits exploded and the economy crashed. kentuck Apr 2017 #17
It's going to happen much faster under this insane bunch. Elwood P Dowd Apr 2017 #20
Because they can? Phoenix61 Apr 2017 #3
Exactly. The Velveteen Ocelot Apr 2017 #9
That cannot be said enough. kentuck Apr 2017 #18
Wages are 100% deductible, so ... dawg Apr 2017 #21
If corporations have more money after taxes, they supposedly invest it or pay it out in dividends. Hoyt Apr 2017 #23
Latest Discussions»General Discussion»Corporations do not creat...»Reply #9