And my point is, they already do, and it isn't helping the economy! A rich person living an opulent lifestyle, is not going to create many jobs or much economic prosperity. Their wealth is secure, whether it be in treasury bills, or foreign investments, or whatever... you can't touch it. You can tax as income, the amounts of wealth the rich people live on, but that will not be enough to pay the bills you've rung up. What you NEED to happen, is for these people with wealth, to spend some of that wealth making more money, earning an income.... but your actions have been counter-intuitive to that result. You believe we should tax these people more, and I am saying, go ahead... you won't stimulate the economy that way, you won't create jobs, or economic prosperity that way... but go ahead, see where it gets you! The more you tax income earning of the rich, the less of it they will do, because they have plenty of other options.
Two points. First, the wealthy are going to make money somewhere and the second point is we can't lower their tax sufficiently to compensate for lower wages in other countries.
Take a company with 500 employees. In the US the employee makes $20/hr. In a foreign country they make $10/hr. (I'm being conservative here and overly generous there. It's probably more along the line of $25/hr here and $3/hr or $4/hr. there.) So, for the sake of argument, let's say a savings of $10/hr for 500 employees is $5,000/hr. and the average person works approximately 2000 hrs a year which results in $5,000hr X 2000hrs. = $10,000,000. That's ten million.
Now, let's suppose the owner is paying 30% income tax now and we raise it to 40%. They pay an extra 100,000 on each million they bring/use here but they've made an additional 10 million. The tax can never be lowered sufficiently to persuade them to bring their business here because the tax would have to be lowered enough to cover the 10 million they make overseas which is impossible so tax plays a minor role, for them.
"For them". Those are the key words. $100,000 taken from one million (10%) hurts a lot less than $2,000 takes from $20,000 (10%).
To sum up it's not the taxes that cause companies to move overseas. It's the wages.
So, one may ask, "Why would the business owner complain about taxes if taxes played a minor role?"
The answer is "philosophy" or beliefs or simple greed. They can well afford to pay more in taxes but don't believe it's right for them to pay more than other people. There belief is, "Why should we pay more than the poor person?"
That's all it is, Dixie. It's not complicated. It's not a mystery.
That said, the only way we can unite the world is by making a level playing field. We can continue to send aid to poor countries or we can go there and build factories and provide them jobs and slowly but surely their standard of living will increase. The "down" side, if one wishes to see it as being a "down", is that as their wealth increases ours will decrease. It is a natural consequence.
Ones wealth is simply a comparison between others and themselves. In other words wealth is not a specific number. The person living in a third world country making $10,000/yr is wealthy as he/she can go to the dentist and pay $1.00 or buy a weeks worth of groceries for $5.00 or visit a doctor or buy a product made there for pennies. They could even afford part-time domestic help!
Why is the Chinese citizen paid $5.00/hr to assemble microwave ovens and US citizens are paid $25.00 to do the same job? Obviously, the microwave company is going to hire Chinese people to assemble them. No amount of tax breaks are going to convince the microwave business owner to pay US citizens $25.00/hr. It ain't going to happen.
So, what's the result? The wages of the people with "regular" jobs either stagnate or decrease while those with businesses dramatically increase as we have seen happening. (The rich get richer and the poor get poorer.) While the "regular" worker is not really poorer compared to the rest of the world as the products they buy are made by people making a lot less money (rather than, say, 20 years ago buying a TV set made here by someone earning $20.00/hr they are able to buy a TV set made by someone earning $4.00/hr).
However, while the TV set is cheaper it would be a lot cheaper if the person assembling it was paid directly but the business owner/middleman is pocketing the difference. A huge difference. The person pocketing the huge difference is the person with whom the "regular" worker has to compare himself, not with the Chinese person making the TV.
So, what does that mean? It means whenever the regular worker has to purchase a product or service made by someone here they realize they're poorer than they thought because the wealthy are competing for the same product/service. If the plumber can go to the home of a wealthy individual and charge $100/hr he's going to charge the "regular" worker $100/hr, as well. The same principal applies to doctors and lawyers and dentists and any other profession in demand.
The bottom line is a relatively small but appreciable segment of society is experiencing rapid wealth increase while the rest of society is headed in the direction of the Chinese worker because the rest are doing the same job as the Chinese worker.
History has shown us that when a great disparity becomes apparent between groups of citizens it never ends well. I'm sure Marie Antoinette felt she didn't have any obligation to share her cake.
So, where does that leave us? As you can see the problem is much greater than simply lowering taxes.
Do you have an alternative solution?
