Job-Killing Taxes!

In: Employment Politics US Economy

29 Jul 2011

I keep hearing from Republicans that eliminating tax breaks and loopholes for corporations will cut jobs. The truth is that corporations are experiencing huge profits, and are not hiring. I did a quick and dirty chart over at Fred to illustrate this:

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if I had the time I’d look into sector breakdowns and who is currently enjoying these tax loopholes – maybe someone else wants to do it?

Here’s another way of looking at it:

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The profits are also not being passed on to employees: The long-term perspective below shows the degree to which the working man is currently getting the shaft:

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(These later two charts are via)

9 Responses to Job-Killing Taxes!

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Matt

July 29th, 2011 at 6:50 pm

Aren’t you comparing apples and oranges in the first chart? (corporations don’t make up all of private employment). The same for the second. Do you have any data on non-corporate profits or corporate job openings? The last chart seems to comport to the notion that this is the worst recession since the great depression. I don’t think it has anything to do with profit taking.

I’m all for closing loopholes, but let’s get the economy healthy again. There’s nothing in the Constitution that prevents companies from offshoring jobs. Let’s not make it more attractive for them.

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Doug

July 30th, 2011 at 9:00 am

You are using a straw man argument. What you are proposing is not the Republican position. Their position is closing loop holes and eliminating tax breaks without reducing the overall tax rate will kill jobs. Because doing so is a tax increase. The main reason corporations are not hiring is because of uncertainty (ObamaCare, Debt Ceiling, growing/morphing regulation, et al).

As for the corporations enjoying loop holes, look no further than GE (who’s CEO happens to be the chair of Obama’s jobs commission. They earned $5 Billion (that’s right, a ‘B’) in profits last year and did not pay a dime in taxes. Furthermore, the stimulus package that passed had all sorts of loop holes for businesses.

If we want to grow the economy, we need to reduce corporate taxes (providing overseas businesses incentives for locating here … imagine if China outsourced jobs to us!), simplify the tax code for both corporations and individuals, and provide smart, non-partisan regulation.

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Matt

July 30th, 2011 at 9:52 am

Megan McArdle: A Few More Charts That Should Accompany All Debt Ceiling Discussions:
http://www.theatlantic.com/business/archive/2011/07/a-few-more-charts-that-should-accompany-all-debt-ceiling-discussions/242790/

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Alfred Russel Wallace

July 30th, 2011 at 11:33 am

Chart 14 above is fascinating, but we need to see similar plots based on other years… We know that the Dow is still lower than it was in 2007… and it was exceptionally low in 2009. I would expect profits and the Dow to predict subsequent changes in wages and employment, not the other way round….

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Kim

July 30th, 2011 at 9:51 pm

You can’t have it both ways. You either pay CEOs extraordinary amounts of money because they are courageous visionaries who create something out of nothing, or you paint them as scared little boys (since the author only says working MEN in this piece I’ll bias the same way) who are too uncertain and scared to help this country. Can’t have both. Even if you blame it all on Obama.

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Alex

July 31st, 2011 at 8:26 am

Perhaps companies are engaged in a little balance sheet repair and paying down their debt and accumulating cash on hand after their near death experience and complete seizure of the credit markets in 2008. It might prevent things like ohhh, multi-hundred billion dollar bailouts down the line.

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Dave

August 1st, 2011 at 11:02 am

How’s that hope and change working for ya?

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Kay

August 1st, 2011 at 8:55 pm

I’m not getting the logic of some of these comments – and I mean straight logic, not partisan talking points from either side.

One example: if corporations are already not paying the taxes they should be assessed according to existing tax law (by using various accounting arcana), I don’t understand how reducing the corporate tax rate can help the economy. In other words, if you are currently assessed at x% and pay nothing, how does being assessed at x-n% next year and paying nothing help the overall financial situation?

Also, a loophole is “a means of escape or evasion; a means or opportunity of evading a rule, law, etc.”* If you strip away partisan rhetoric, how is it technically possible for the closure of a loophole to be a tax increase – except insofar as that it requires past users of that loophole to pay the taxes they already owed by law?

* loophole. (n.d.). Dictionary.com Unabridged. Retrieved August 01, 2011, from Dictionary.com website: http://dictionary.reference.com/browse/loophole

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RJS

August 3rd, 2011 at 1:03 pm

Look, until last week, equity prices ere rising because asset income was rising. Asset income was rising because labor income was falling. Labor income as falling because people in the labor force (employed or looking) have virtually no control over their wages and salaries. This is a consequence of the decline of union membership and globalization. In other words, these are the fruits of the Reagan revolution. It worked as advertised. If you are white and in the top 1 percent of wealth holders, you are in Heaven–what do you think Santa Barbara is, America? Why be defensive about it? Southern Strategy (1968) + plus Reagan = America in the 21st century.

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