The Rich keep money/wealth in their Company and create Jobs

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The Rich keep money/wealth in their Company and create Jobs to avoid higher personal income where is the evidence that this works ? What I mean is if the Business Owner is making less Income a smaller paycheck would he have any Incentive to hire new Workers and or is this claim that higher taxes creates Jobs nonsense because not every Business Owner is going to hire to avoid higher taxes thank you ?

What Conservatives Won’t Tell You: Higher Taxes Equal Reinvestment And Jobs

By Ray Medeiros

What the conservatives do not know or don’t reveal is, higher taxes make businesses re-invest most of their profits into the corporation.

This is one of the reasons President Clinton had a booming economy. He raised taxes on the wealthy. Rather than pay the higher tax rate by extracting profits for personal use and having it sit on the sidelines, they re-invested it, creating a chain reaction of jobs.

What we are seeing today is lower taxes leading to owners extracting money rather than reinvesting it. The cash sits on the sidelines in bank accounts, or in their wallets. So let’s raise taxes, and “force” this idle cash back into businesses for reinvestment and create the jobs this country needs.

http://www.politicususa.com/en/higher-taxes-jobs

Reinvesting money in your company is one way to avoid taxes however there are many other ways. Purchasing equipment and hiring outside firms to do do things are just a couple of ways to reinvest without hiring. Labor costs are something that most companies try to keep low. The liability is high and the new truck or equipment can't sue you like a person can.

Personally I see NO connection between avoiding taxes and hiring.

the growth of service industries would produce the jobs, since most services cannot be done by machine. Producing widgets and grommets in plentiful numbers is just the thing for automated production. So if you want to see lots of people working, pray for the growth of service industries.

Which raises an interesting question. If the jobs are not created, just how will the capitalists sell the widgets their factories make if there are insufficient people out there with the means to buy the widgets. I have always wondered about that. The aggregate wages paid to labor cannot clear the output they make from the market.


ruveyn

Expenses mean the company does not pay taxes on that money, The expense can be salaries (jobs) or equipment or real estate or other things. Outside firms cost is for example consultants for safety or efficiency or hiring people from an accounting firm to do payroll.
Companies want to keep payroll low because each employee is a liability, they could get hurt, say they are harrassed and sue, or many other things. They must take the man hours to train each employeee, that cost can be quite high, plus employees cost much more than their salary there are the employers payroll taxes, unemployment insurance, health insurance etc.

the only time that employing a human "pays" in the accounting sense is if the human can produce greater income by his labors than the cost of hiring, training and paying him costs. It is simple arithmetic. Companies do not exist in order to produce jobs. Rather, they exist in order to produce goods and services. It is the value that customers pay for that support the company, not the jobs they open up to produce their goods and services.

ruveyn

So much truth in what ruveyn has said I can not even argue with it.

The other thing that one has to take into consideration is government regulations.

And comets. Just look what they did to the poor dinosaurs.

We're just throwing out vague threats with nothing to back them up, right?

Well, that seems pretty obvious: they also pay some portion of their labor to produce luxury widgets to be purchased only by the capitalists. Then that labor buys the leftover regular widgets, and the capitalists sell all their goods.

But I wonder the same thing about most of America - I look at small towns, and I see a lot of goods going in and not much of anything coming out. Most jobs in small towns revolve around keeping the town running. Is small-town America basically tax subsidized?

Too many of these amateurish analyses look at only a two or three transaction chain.

It is not only the direct employment of workers that creates jobs. Anytime that a company buys a widget, hires a contractor or builds a new plant, jobs are created or retained.

No company, however, is going to spend money for the sole purpose of avoiding taxes. It is a simple rule of tax law that, It never hurts you to earn an extra dollar.

What does encourage companies to reinvest is the self-interest of directors. Dividends are taxable as income in the hands of directors, but capital gains are taxed at a much lower level. Accordingly, executives prefer to receive the bulk of their compensation in stock options (which even if immediately exercised are still capital gains), and fund managers prefer to realize growth through increase in stock value rather than through income instruments.

All of America is tax subsidized. That is part of the problem. We are in a Hole and we don't quite know how to get out.

ruveyn

Sarcasm: Yeah cause fining a brokerage firm for having too many brokers makes a lot of sense...

It's a bloody brokerage firm for goodness sakes they are supposed to have brokers...

He wasn't fined by the government, he was fined by a self-regulating financial organization controlled by the larger financial institutions. Try again.

btw, comets are badass. Fined 15K? Plz, if a big enough comet hits us it could take out half a continent! Priorities, man, priorities!

Which he is required to join to be in that business, stop trying to split hairs.

Or how about the NLRB telling Boeing they can't have a factory in South Carolina?

Boeing could have set up in South Carolina. But it would have cost them every Federal contract they have.

NLRB cannot forbid any company from setting up anywhere.

ruveyn

It's not splitting hairs when big business is the driving force behind it. Where do you think this idea originated? Who do you think pushed for it?