For the above explanation about taxes, I left in the assumption that the rich are the ones that create jobs,

so that the focus can be on the effects of the tax rates for the richest Americans. But the truth is that

consumers are the ones that create jobs. Tax rates for the rich have nothing to do with it. If a business of

any size sees a way to increase before-tax profits, it would be to their advantage to do so. They want to

keep their tax bills at a minimum, of course, but raising before-tax profits will also raise after-tax profits . Very

little money for rich individuals, and ABSOLUTELY NONE for corporations, will be caught up in the margin

where the additional before-tax profits will be lower than the additional taxes. If any business

decision-makers worry about the taxes more than the actual effects on the bottom line, then they aren't

making wise decisions. Increasing before-tax profits for all practical purposes is the same thing as

increasing after-tax profits.



If a business or a potential business sees a demand for their products and/or services that will generate a

profit, they will do what they can to get that profit. If it means hiring more workers in order to meet that

demand, and the cost of additional workers is lower than the addition to potential profits, then they will

hire more workers. The tax rate on the business has nothing to do with it. What is needed to make it all

happen is consumer demand. The people who will do the buying in the economy are the ones who need

the buying power to make it all happen. It is a consumer-driven economy. More income for the middle

class, for the working poor and even for the non-workers will create demand. Consumer income and

consumer confidence in the economy create jobs.



I mentioned consumer confidence. What about business confidence? Business confidence starts with

consumer demand. If the masses in the population aren't buying, then there won't be any business

confidence. Businesses prefer stable government policies for sure, but most of them won't tell you that

stable higher taxes will create more business confidence, in terms of creating jobs, than stable lower

taxes. But that is the truth. Eliminating loopholes will create more stability than anything, because it levels

the playing field. Businesses will quit scrambling around, paying expensive tax lawyers and accountants,

looking for loopholes if the loopholes no longer exist.



So, you don't want to raise taxes on 'job creators'? Then quit demanding that the poor pay more taxes.

Quit backing policies that have been destroying the middle class for the past 30 years. Prior to 1981,

incomes for all classes rose together as the economy grew. The upper classes got more than the lower

classes, but all gained at equivalent rates. Since then, the top 10% have received more than the rest.

Even the gains of the top 10% have paled in comparisons to the gains of the top 1%. Those are economic

facts that are readily available to anybody who cares to fact-check any of this. All of this is the result of

changes in economic policies in Washington. These policies have created a situation where income that

would have been distributed evenly based on policies that were in effect throughout the 1950s all the way

through 1980 is now all going directly to the top. Wealth has been redistributed. But not from rich to poor,

like the political rhetoric says. Wealth never gets redistributed from rich to poor in the United States

today. It always gets redistributed from poor to rich. Another economic fact that you can verify if you

choose to.



How does this affect the overall economy? What I am talking about has nothing to do with a sense of

"fairness" or "equality" or anything like that. I am talking about the overall economy. Here is how the

economy works in a nutshell:



The economy is comprised of people who buy, and people who sell. When enough goods and services

get bought and sold, then the economy thrives. When enough goods and services don't get bought and

sold, then the economy goes into a recession. The basic economy is the buyer and seller relationship .

When things are going well, then this relationship is going well. When things are not going well, then this

relationship is not going well. It's as simple as that. There are other things that influence the economy in

very big ways. These are all familiar actors in the economy: the government, the banks, the import/export

market, the Federal Reserve, even the weather. These are all things that influence the economy for better

or worse. But their influence, good or bad, only matters to the extent that they affect the buyer / seller

relationship. When you have 30 years of policies that are designed to benefit only one side of this

relationship, then the economy gets out of whack. You can't have a full recovery from a deep recession

without restoring the balance between buyer and seller. Free market economics, capitalism, is based on

free transactions in which both sides to every transaction are equal. Continuously giving more to one side

at the expense of the other side does not promote free markets, it destroys them. I don't care what the

rhetoric says. Free markets need both sides of all transactions to have economic power. But, you may

say, the rich spend their money just like the poor and middle class do. Wrong! If they did, they would all

be paying the maximum tax rate on all of their income. But they don't even come close. Instead of

spending their money on consumer goods that everybody else does, they put much of it in tax shelters.

Tax shelters that mostly do not create jobs. The poor and middle-class, on the other hand, spend most of

their incomes on goods and services that the economy produces. In economics terms, this is called the

marginal propensity to consume . The poor have a very high one, the rich have a very low one.



Which brings up another hot issue that is driven by rhetoric: why raise taxes on the rich when they already

pay most of the taxes? Well, they pay most of the income taxes, but not most of the other taxes. The other

taxes are mostly regressive. The income tax used to be very progressive to balance this out. But policies

of the past 30 years have taken away much of the balance. The rich end up paying more income taxes

because the policies have given them a much larger share of the income, and put more people under the

taxable limit for income. Higher taxes on the rich didn't create a situation where the rich pay more income

taxes - lower taxes on the rich did. The share of total taxes paid by the rich may have gone up due to the

rich having a much higher share of the total income, but the share of their income that is taken away in

taxes has gone way down, to historically low levels. Policies in Washington have created this situation.

Taking away money from those who earn it in order to give it to those who don't earn it? That has already

been done. The working class has had their wealth confiscated and given to the very rich. The wages

paid to workers used to go up when their productivity went up. The economy thrived when that happened.

But for the past 30 years, workers' wages have not gone up while the workers' productivity has skyrocketed.

This is not some liberal rhetoric. This is not some liberal theory. This is economic fact.

