“Poor Can’t Create Jobs”

I just finished watching “Spitzer & Parker”, a daily political talk show on CNN. (The Spitzer part is Elliot Spitzer the infamous former Governor of NY). A guest on the show was Mary Matalin a Republican spokesperson and strategist. They were discussing the pending extension of the so-called Bush tax cut and Mary hit one of my open nerve endings. One of the things I find most annoying is the notion that the wealthy are the “job creators” and as such should be appreciated and coddled. Mary added salt to my open wound by saying, and I quote, “nobody ever got a job from a poor person”. I counted to ten and rushed to the computer before I cooled off too much. (I spent the weekend in a hospital with a touch of pneumonia and either because of the infection or the antibiotics I get a bit irritable and emotional. I will blame my outburst on this.)

Today I was at Walmart and saw many shoppers very few of whom looking like anything but “poor people”. I wonder how many jobs there would be if all of them went away. If jobs would go away if they are not there, does that mean that they created the jobs? By shopping there they are creating jobs and if more have money to spend there they create more jobs. The “job creators” could pump as much money into Walmart as they want, but without the people in the store shopping there would be no people working. I imagine among the crowd of shoppers were even some individuals collecting unemployment or even on welfare. Does that mean that people on welfare can create jobs? Hmmm. I drove by McDonald’s and didn’t see many BMWs and Mercedes, or even one Cadillac, for that matter, parked in the lot. I wonder if “poor people” are also creating jobs there?

The whole debate about the tax increase on income over $250,000 which would occur if the “Bush” cuts are not extended, from the conservative side, is argued that increasing taxes on incomes over $250,000 will slow the recovery. In my opinion, they really don’t believe that. The right truly feels that the success of the country is attributable to the people in power and they should be rewarded, as they were by Republicans, with a tax cut during the Bush administration and not “penalized” as they would be if the tax cut is allowed to expire.

I wanted to test my logic so I did a little quick arithmetic:
Let’s say an individual or enterprise has earnings of say $500,000, for example. And this represents 5% gain or profit. (That is not unreasonable given the current circumstances.) For this they needed to have an enterprise revenues or investments of $10,000,000. The 3% increase would not apply to the first $250,000 and at 3% on the remaining $250,000 would result in an increase of $7,500. Mind you, that’s $7,500 on $10,000,000. If they have no deductions, the taxes at 39%, on $500,000 will be $195,000 and that $7,500 would be in the noise and certainly in the noise when compared to the $10,000,000.
I cannot believe that it is an amount that would alter anyone’s investment decision. Even if it did, with their Republican champions screaming about how bad the increase would be for the economy and the Country, would they, if not as good patriots but as good businessmen stick with the original investment and not let the tiny amount drive the Country further into debt, prolong the recession, and if their champions are right, injure them financially?