Saturday, May 19, 2012

Job Creators? Really? You’re Fucking Kidding, Aren’t You?

The political right keeps trying to perpetuate the myth that those earning the top 10% of income are “job creators”. In the last post on this site, it was pointed out that these people focus far more energy on eliminating jobs than creating jobs. The other argument the right tries to make involves the revenue issue. So, let’s look at an example of what happens when a “job creator” is compared to an ordinary citizen. In this case, the “job creator”, call him Mr. Jobs, has an income of $40,000,000. He could be a hedge fund manager or an investment banker but, like Romney, enjoys a sizable income from carried interest. Mr. Average earns the median income as reported by the IRS for the year, 2011 which amounts to $46,326. To begin with, Mr. Jobs will pay around $6,000,000 in federal income tax. While that is not a small amount, it is considerably less that $14,000,000 which would be the tax in the event that Mr. Jobs received a salary for his work. Additionally, Mr. Jobs will not have to pay any payroll taxes since he receives no wages or salary so that saves him $5,400,000 in taxes (and deprives Social Security and Medicare of that amount of tax revenue). Mr Average, on the other hand, will pay $3122.50 in payroll taxes (as will his employer). Since it would take 863 Mr. Averages to equal the earnings of Mr. Jobs, all of those Mr. Averages would actually pay $2,694,717.50 into Social Security and Medicare as would their employers so the government would receive $5,389,435 from 863 Mr. Averages as opposed to $0 from Mr Job. Trickle down posits that tax revenue would also benefit by lower taxes on Mr. Jobs but when comparing income tax receipts from 836 Mr. Averages we see that 836 Mr. Averages, each paying $2106 in federal income tax would contribute $1,760,616 income tax revenue to the treasury. Add to that the FICA payments of $5,228,344 for a total of $6,988,960 or $988,960 more total revenue than Mr. Jobs. Finally, there’s the issue of demand. 836 average income people will create far more demand than 1 obscenely wealthy individual. 836 people will buy more cars, eat more meals in restaurants, visit more dentists, and generate far more activity which, in turn, will lead to greater demand for products and services and more likely induce those who are on the receiving end of that demand to create more jobs. If, at this point, one still feels the need to pamper job creators one should refer to http://nick-hanauer.com/.

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