Originally posted by wittywonka
Tell me where I go wrong—that’s all I ask for you to do. I’m tired of hearing politicians’ sound bites, and I’m tired of reading (and making) snarky comments on RHP that don’t do much but hijack mid-sized threads. I want to have a serious, legitimate discussion about these issues (and I’m trying to capitalize on that initiative before it fades back into ...[text shortened]... be contributing personal income into their own small businesses, if they even owned them.
Part of the problem is the intentional muddying of the waters by leftists, and to some extent by corporate big business which really doesn't mind a big government environment.
Corporations and the rich are lumped together as a boogieman. Corporations are largely owned by small investors, often grouped together as mutual funds, pention plans, etc. You read about the big guys, the Buffets. You don't read about the thousands of IRAs, 401ks, 403bs, etc. which rely on corporate profit.
Then the rich are also ill defined. Loosely, most people think of the rich as people who have a lot more than they do.
"Hypothetically speaking, why would lowering taxes for corporations spur more job growth through investment in the economy?"
In the current international market, corporations can seek the most favorable tax situations in multiple countries, just as they seek cheaper labor if all else is equal. If our taxes are much higher, and they are, corporations will at least locate their financial offices, accounting so that they can pay the lower rate.
Sometimes we benefit from such competition, example of this are the locating of BMW, Mercedes, and VW plants in the US.
"Even if you don’t see that as an intrinsically negative consequence of wealth inequality in the United States, why would you assume that corporations need even more money from tax breaks before they suddenly decide to reinvest it?"
This mixes the matter of corporations and the rich. Yes, Microsoft and Bill Gates represent a large corporation and a very rich CEO. Far from the norm. A lot of corporations barely make ends meet. GM and Chrysler would be out of business today without government bailouts.
Profit margins tend to be a lot lower than most of us could even consider, which is why market downturns tend to upset larger corporate entities so badly. Then if they do well for a couple of years, the left is at their throats for excessive profits.
On "uncertainty", there can never be a business model that doesn't include some. Business people are risk takers. But to the extent they can the seek predictability, stability, to that they can properly assess and measure their risks.
Obama's health care plan, creates massive uncertainty, and instability. In its first couple of years hundreds of companies have applied for waivers. Like much federal legislation, it provides for masses of bureaucrats who will write regulation implementing the bill, and nobody knows what they will write. At a time when health care was often a third or more of the cost of hiring an employee, now all the old equations go out the window, but it is virtually guaranteed that the new costs will be greater, perhaps exponentially.
I will concede that really big business generally likes the highly regulated atmosphere. It harms them far less than the pesky start up competitors. They have in house law departments, and accountants, and compliance experts to deal with issues that smaller entities have to handle by the seat of their pants.
As to defining big or small businesses, why? Is it fair that big and small live by different rules? In some ways, they already do. What small business on the verge of collapse, could get billions of dollars in government loans? Or get the government to tell their creditors "buzz off" you lose? The taxpayers bailed out AIG, and the company immediately gave employees big bonus checks. GM did the same right after telling many of their dealers to take a hike. It should be pretty clear that a great deal of the unfairness and inequity actually originates from government involvement in business.