Tax cuts for the rich don’t create jobs – period

Thought this article on truthout actually tells the truth about the myth that tax cuts for the rich create jobs. It says it right off the top: “Let’s cut the baloney about jobs and rich people’s taxes. If corporate profits automatically turned into jobs for the little folk, the unemployment rate would be plummeting.”

That is what I ask all my friends in love with keeping the Bush tax cuts for the rich. If the tax cuts are so necessary to create jobs then where are all the jobs that were created during the time the tax cut has been on the books?

Companies don’t create jobs because they have extra money jingling in their pockets. They take on new workers when they want to expand, and right now the demand’s not there to warrant that growth. Corporations are in the business of maximizing profits for the benefit of their managers and shareholders. They’re not in the business of creating jobs, nor should we expect them to be.

And so how should we respond to Republican claims that restoring Clinton-era income tax rates for the wealthiest 2 percent would destroy jobs? We shouldn’t. They are irrelevant.

An employment policy based on further enriching the richest Americans — who may or may not spend their wealth on job-creating ventures — is like trying to feed chickens in the barnyard by dropping feed from an airplane. It’s far more logical to focus tax cuts on activities that are likely to expand American business.

The Rich Are Not Going to Give Us Jobs

Kasich plays loose with the facts in latest campaign ad

John Kasich, the cheap labor conservative candidate for Ohio Governor has issued another television ad. Like previous ones, the Kasich campaign plays loose with the facts.

Kasich’s statement that Ohio is “one of the highest taxed states in the country” is debatable and depends on whose measurement is used. Supporting documents with the ad cite the conservative-leaning Tax Foundation, which Strickland and others reject as unreliable. They prefer analyses by the Federation of Tax Administration using U.S. census data that ranks Ohio much better.

A number of business leaders, including from the Ohio Manufacturers Association and the Ohio Economic Development Association, say that Ohio’s business climate has improved and is more competitive with other states since 2005. That’s when legislation was enacted to cut the state income tax by 21 percent (it’s been reduced 16.8 percent so far) and eliminate the state’s tax on business machinery, equipment and inventory.

Ad watch: ‘A New Way,’ from the Kasich campaign

John Kasich for Governor of Ohio Television Ad: “New Way”

Some people might complain that I haven’t looked at any Strickland ads and they would be right because there hasn’t been any yet. Kasich has been running his ads as well as ads from the GOP in heavy rotation here in Columbus especially during the news broadcasts.

John Kasich wants to outsource Ohio development efforts

John Kasich, a cheap labor conservative and candidate for Ohio Governor, announced on Tuesday his plan to throw 400 state workers out of a job and provide corporate welfare under the guise of “economic development”.

Kasich wants to replace the Ohio Department of Development with a private, nonprofit corporation staffed by people he personally appoints. He also plans to have final approval on any development money handed out. How convenient.

State development department employees whose jobs would be affected would be able to apply for jobs with the new nonprofit, private development entity, Kasich said.

“They would not be public employees,” Kasich said. “We don’t want public employees.”

Kasich said he would be chairman of the JobsOhio board and Taylor probably would be vice chairman, “but we don’t want a government entity. We don’t want the civil service restrictions. We’re going to have to work through all the privacy questions, but we’ll work through that.”

The board, Kasich said, will be empowered to negotiate incentives and other deals with companies “all the way to dotting T’s and cross I’s (but) the final decision will remain inside the governor’s office.”

Funding for JobsOhio would come from the state and private sources, including individuals, businesses, labor organizations and foundations. The Kasich campaign could not immediately estimate how much state funding would flow to the new nonprofit entity or how much would be required to operate it.

Kasich would privatize state development efforts

So basically his cronies will decide who to give money to and there would not be any oversight on how tax payer money is spent. {snark}How could that go wrong?{/snark}

Kasich is under the assumption that Ohio is not pro-business – well his idea of pro-business (which means cheap labor, no taxes, and ample corporate welfare like little to no regulation).

“We have a much better tax system going forward because we no longer have this punishing tax on investments, and inventory, and machinery and equipment,” he said. “We no longer tax corporate profits. Most states tax corporate profits, and so we are much better going forward.”

The commercial activities tax, which replaced those taxes, imposes less than half the burden of its predecessors, State Tax Commissioner Richard Levin said.

“In our region, we have the lowest effective tax rate for businesses,” said State Development Director Lisa Patt-McDaniel.

Ohio’s regional competitors include Michigan, Indiana, Pennsylvania and, to a lesser extent, West Virginia and Kentucky, she said.

Other more formidable competitors are farther away: North Carolina, South Carolina and Georgia. They vie with Ohio because they have more undeveloped land, are in the Sun Belt and a have a cheaper work force image, Patt-McDaniel said.

But Ohio boasts drawing cards, too: a higher-skilled work force with a better work ethic, she said.

Fresh water, plentiful in Ohio and more scarce in the Sun Belt, will become a bigger factor in economic development over the next 50 years, Patt-McDaniel said.

Ohio business tax rates ‘much better’

The reason Ohio is having a struggle now is not only from the 2008 collapse sponsored by cheap labor conservatives like Kasich but also because those same cheap labor conservatives did a number during their 16 years in charge of Ohio. Governors George Voinovich (1991-1998)and Robert Taft (1999-2007) molded the state with plenty of “pro-business” policy. Current Governor Strickland hasn’t had much time to do anything different aside from stopping the final part of a 21% income tax cut from going into effect to try and lessen the pain of an $800 billion dollar budget shortfall.

It isn’t unusual for a cheap labor conservative to have selective memory. Tuesday night President Obama arrived in Columbus for a campaign event for Ted Strickland and of course the Columbus Dispatch had to have a comment from Kasich:

Asked today about the president’s visit, Kasich wasn’t impressed.

“Obama’s a fine man, but his economic policies are flat-out not working,” he said. “I would love to talk with him about the power of free markets and free enterprise and lower taxes on work and lower taxes on investment and risk-taking.”

Obama arrives in Columbus

I wonder if the phrase “squeezing blood from a turnip” means anything to a cheap labor conservative like John Kasich.


The Columbus Dispatch had some further comments on Kasich’s “JobsOhio” that I had missed myself when thinking about it. Such a non-profit private entity would be in a very gray area when it comes to public records. I’m sure John Kasich best fantasy is giving tax dollars to his business buddies and no one knowing the details until years later when the law suits finish in the courts and he is back working for Wall Street or in the US Senate (or both).

Advocates of government transparency might have shuddered at John Kasich’s proposal to put the Ohio Department of Development out of business by privatizing its duties and handing them to a government-funded nonprofit.

The plan of the Republican gubernatorial candidate to create an entity known as JobsOhio raises questions about ongoing access to state records and financial information that now are a matter of public record.

A nonprofit organization performing a public purpose with a funding hybrid of tax dollars and private donations is a much tougher and murkier creature to explore when it comes to obtaining records under state law.

Kasich nonprofit plan risk to transparency? 

Kasich is wrong for Ohio Governor because he offers same rejected GOP plan

The 2010 election for the Governor of Ohio is a perfect example, on a smaller scale, of the Republican obstructionism and having no real ideas for governing. The GOP is also supporting a guy with a Mel Gibson short fuse.

John Kasich, the GOP candidate for Governor, served in the US House of Representives from 1983 to 2001 then left to cash in on his political connections as a contributor to FOX “news” and working for Lehman Brothers – the investment house that collapsed which led to our economy bombing in 2008. While in the House he was chair of the budget committee and helped craft a Federal budget that had a surplus for the first time since 1969.

Great news right? Well, not so much..

The surplus was based on financial deregulation, NAFTA, welfare reform, and first the dotcom bubble and then the housing bubble. Basically his “success” was based on the main GOP campaign tool box = pro-business policy, low taxes, and entitlement spending cuts.

Fast forward to 2008 and those “good” things led directly to the financial collapse. The bankers played their game and took their obscene paychecks, the housing bubble burst leading to millions of foreclosures, and the collapse of the economy took millions of jobs with it.

Kasich wants to do the same thing to Ohio. Yay!

Mr. Kasich, who held a “business roundtable” session in Lake Township on Tuesday, said the low ebb of the economy was made clear to him when he stepped out on the eighth floor of a downtown Toledo office building and saw nothing but vacant space.

“It was all empty, you know. The most important thing we can do here in this state is we’ve got to create a business-friendly environment so we can get some jobs,” he said.

Kasich says empty space is proof of tough times for city

A business-friendly environment is code for no regulations and no taxes – anything less than that doesn’t seem to work for him.

“I understand you have a very fine mayor here in Toledo, good guy, independent and all that, but he’s been saying he doesn’t like my program because I want to cut taxes. Well, how are we going to get anybody to come in here if we’re one of the highest-taxed states in the country?” Mr. Kasich asked.

Ohio has given away tax breaks like candy for decades. In fact major businesses in Ohio pay less income tax than many Ohioans. I wrote in a post in 2004:

Meanwhile the business inventory tax is being phased out, utility poll taxes were eliminated sometime ago, 81% of Ohio companies pay no more than $2000 a year in income tax, you are more likely to see tax breaks given to businesses for negligible requirements on their part, and Workers compensation taxes have been quite low for several years.

When it comes to community needs, Wachtmann and Gilb don’t care

That really hasn’t changed since then. The state has not added any income taxes and in fact had a 21% tax cut that was being phased in before the 2008 collapse forced the state to delay the last part of the cut. In 2008 Ohio’s corporate tax rate was 5.1% and yet the state is flirting with $8 billion dollars in red ink, cuts in dozens of programs and education among others.

In the current two-year budget, Strickland – and the General Assembly – reduced state general-fund spending by nearly $2 billion. In the previous budget, spending was cut by $1.5 billion.

CAMPAIGN AD WATCH: ‘Pulled’ – GOP anti-Strickland ad

As Strickland summed up Kasich as a candidate:

Bringing up Mr. Kasich’s claim that some 400,000 jobs were lost during his term, Mr. Strickland said, “what John Kasich and his cronies on Wall Street did was more responsible for job loss in Ohio than anything I’ve done.”

He said Mr. Kasich had voted as a congressman against a $1 billion veterans’ benefit targeted for treating head injuries and repeatedly voted for a bill to allow wealthy people to avoid taxes by renouncing their citizenship.

Strickland challenges Kasich to debate tax elimination plan

Strickland has it right. The so-called 400,000 job loss (really only 379,000 through June) was not Strickland’s fault. He also isn’t responsible for the Republican controlled Ohio Senate that offered no plan to balance the budget and tried to hold onto the final bit of that irresponsible 21% tax cut. He also isn’t responsible for banks holding their bail out money and not lending it out. Strickland isn’t responsible for the lack of sales keeping any recovery muted and he sure can’t force businesses to do anything in Ohio until the recession subsides.

Kasich doesn’t have any real solution to Ohio’s economic problems. They are much bigger than the Governor and simply “cutting taxes” isn’t going to work. If Kasich wins then Ohio will continue down the road of bad roads, worse education, and increased suffering of people not associated with the big banks like Kasich.

Kasich’s “business-friendly environment” plan is the same old same old screw regular people plan that a majority of Americans rejected in 2008 when they gave control of the national government to the Democrats. Why in the heck would we want that failed plan in Ohio.

Kasich is just wrong for Ohio. Not to mention he seems to have a short Mel Gibson type temper.