Nick Hanauer – very rich himself – explains that the rich are not the job creators. From Bloomberg Businessweek:
Raise Taxes on Rich to Reward True Job Creators
by Nick Hanauer
December 07, 2011, 10:22 AM EST
. . . I’ve started or helped get off the ground dozens of companies in industries including manufacturing, retail, medical services, the Internet and software. I founded the Internet media company aQuantive Inc., which was acquired by Microsoft Corp. in 2007 for $6.4 billion. I was also the first non-family investor in Amazon.com Inc.
Even so, I’ve never been a ‘job creator.’ I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.
That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.
. . . If the average American family still got the same share of income they earned in 1980, they would have an astounding $13,000 more in their pockets a year. It’s worth pausing to consider what our economy would be like today if middle-class consumers had that additional income to spend.
It is mathematically impossible to invest enough in our economy and our country to sustain the middle class (our customers) without taxing the top 1 percent at reasonable levels again. Shifting the burden from the 99 percent to the 1 percent is the surest and best way to get our consumer-based economy rolling again.
Significant tax increases on the about $1.5 trillion in collective income of those of us in the top 1 percent could create hundreds of billions of dollars to invest in our economy, rather than letting it pile up in a few bank accounts like a huge clot in our nation’s economic circulatory system. . . .
☞ Lowering the capital gains rate to zero as Professor Gingrich would so confidently do (is there nothing he’s not sure of at any given moment?) or keeping it rock bottom as Governor Romney has pledged to do (he would also eliminate the estate tax) is exactly backwards.
What we need to do . . . other than moving back toward a balance that would begin getting that $13,000 a year into middle-class pockets . . . is to put Americans to work modernizing our infrastructure with projects that will serve us well for 20 and 50 and 100 years. Projects that can be financed cheaply now, when the cost of borrowing is low and contractors are eager for work.
And all that stands in the way are the Republicans.
Quote of the Day
On the day of the 1983 economic summit, James A. Baker 3rd, then chief of staff, realized Mr. Reagan had not read his briefing book. When Mr. Baker asked why, Mr. Reagan responded, 'Well, Jim, The Sound of Music was on last night.'~Professor Herbert S. Parmet reviewing President Reagan: The Role of a Lifetime
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