Some conservative commentators appear to be the victims of conservative think tank propaganda. It is common discussion that taxing the rich would detract from hiring. Lets get some things straight. “The rich” are paying taxes on income, or profit, if you will; not investment or operating expense. In fact, the best hedge against higher taxes may be to invest pre-tax income into increased business expense, such as production modernization, business expansion, marketing and...hiring.
Right now “the rich” are withholding some $2 trillion in investment capital as a hedge against the costs of borrowing and the potential of future business losses. Increasing the tax on gross personal income may help to shake some of that investment loose as a way of reducing taxable income for those “rich” who take their business profits as income. Wealthy people like, lets say Mitt Romney, may find the creation of privately held businesses and expansion, which produces hiring, as a hedge against showing a higher net income Very simply, tax policy can encourage simply moving personal income into corporate income that is taxed at a lower rate.
Lets try a little honesty in this debate over taxing “the rich”. Its not our job to protect the mega wealthy and it is not to the benefit of this economy to allow the growth of massive idle capital formation.
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