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It's totally stupid. It assumes that all business owners want to hire people all the time, but the only thing stopping them is a lack of more money. The myth is that if you cut taxes for the wealthy, they are going to use that money to raise wages or hire more people, which helps workers. This is idiotic. The justification for this is the stupid Laffer Curve which basically demonstrates that higher and higher tax rates eventually (a really high tax rate) results in less hiring because it's unaffordable and they use stupid inverse logic to incorrectly assume that lower tax rates will then result in more hiring. The truth of the matter is that labor is expensive and business owners are concerned with keeping their labor costs down. Just because you get a tax cut doesn't mean you're gonna immediately run out and try to hire someone so you can give them the money. That would be stupid. There are many things you could do with that money that may result in even greater returns such as savings or investments. The only thing that makes a business owner hire more people is the need to hire more people, that is: demand. When demand is up, business owners MUST hire workers to keep up with business and everyone wins. Therefore if you really want to boost the economy, you need DEMAND side economics, which is basically Keynesian economics
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Sep 26, 2015 06:53
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| # ¿ May 9, 2024 04:49 |
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Keynesian policies pump more money into the pockets of the working class through jobs programs or benefits. This temporary boost in low wage income increasing consumer spending. This inevitably goes back to businesses, but because it's an increase in demand rather than supply, businesses are forced to hire more people, which further stimulates spending. You want to keep the capital flowing, but supply side economics makes it too easy for the wealthy to just sit on it and accumulate interest. There's no incentive built,in to actually spur growth, just remove imaginary obstacles
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Sep 29, 2015 18:46
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