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Tax breaks for the rich don't create jobs

Last modified: 12/6/2010 12:00:00 AM
Re 'Truth about the Bush tax cuts' (Monitor letter, Dec. 2):

Don Ewing claims that tax cuts for the rich create jobs. There is absolutely no basis in fact for this contention. In fact, one could make the opposite argument based on the fact that during the Clinton years, when taxes were raised on the on top income levels, over 22.9 million jobs were created and after the draconian tax breaks the wealthy received from 2000 to 2007, only 2 million jobs were created. From 2007 to 2008, 8.6 million jobs were lost.

The truth about our economy today is that there is absolutely no correlation between tax breaks for the rich and economic growth. In fact, a closer look at modern economics demonstrates that we have shifted away from a manufacturing economy to a service economy. Large investors have shifted away from starting new businesses to buying and selling existing businesses. This often leads to a loss of jobs as investors force companies to assume the debt liability of the purchase or merger which in turn results in downsizing and shipping jobs overseas. Thus one could speculate that tax breaks for the rich leads to a loss of jobs, but I won't go there. I will say that speculative investments like hedge funds and private equity hardly create any jobs.

In truth, we are now a consumer society. If you want the economy to return, then you have to put money into the hands of consumers who will then purchase goods at the local Best Buy, Home Depot, Target and Walmart stores. As for the rich, if there's money to be made, they'll soon show up - tax breaks or not.

WAYNE FULLER

Concord


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