Friday, September 23, 2011

Don Ward: Job Creator

Surprisingly, very few people seem interested in taking on the silly 'job creator' BS being peddled by the GOP. Dana Milbank is an exception.

When Republicans talk about the mythic 'job creator' they confuse income, as in profits after all business expenses are paid, and gross revenues - -which no one pays taxes on.

Like Mibank, I too am a 'job creator' who will never create a single job. While I'm not a C-Corp (Milbank is), I am a partner in a law firm and my income comes from the profits of that law firm. But here is the obvious problem with this job creator BS being peddled by the GOP: After all the firms expenses are paid, rent, postage, supplies, computers/office equipment, etc. and most significantly, after all of the firms employees have been paid, I get my portion of what is left, and this is what my income taxes are based upon. You could reduce my income tax to zero and neither I nor my law firm would hire a single additional employee. Likewise, you could double my income tax (please don't) and my law firm would not lay off a single employee.

Wages for employees is an expense that comes off the top before there is any income. No one, no corporation, small business, no anything pays income taxes on revenues that are used to pay the expenses of the business, including personnel expenses, be they employees or outside contractors -- they never have and no matter what happens -- they never will.

If any business - small or otherwise - chooses to add employees, the cost of these employees come out of their pre-tax revenue and NOT their income. Income is reduced by the cost of employees and therefore not taxed -- ever.

Milbank takes a look at the Nation's job creators and discovers nearly all of them are like he and I,
According to Small Business Administration statistics, based on 2009 Census data, 21.1 million of the 27 million small businesses in the United States are “non-employer firms,” which have no workers other than the owner. Of those, 18.7 million are “sole proprietors,” 950,000 are partnerships and 1.4 million are corporations, like me.

When lawmakers talk about small businesses as the engine of growth, they bring to mind entrepreneurs building start-ups from their garages. But when officials talk about protecting the “job creators” from tax hikes, they are mostly protecting a bunch of doctors, lawyers, freelancers, contractors and the like.
So, next time someone tells you that raising the percentage of the top tax bracket will kill America's job creators, tell them to stop being a douche bag. It's consumers who are the job creators.

Demand, and only demand, creates job. Tax cuts will never create jobs.  

Businesses aren't hiring right now because they don't have the demand for more of what they sell, whether it's goods are services.  No matter how many regulations or taxes exist, if a market exists for more of the goods or services any business sells, they will hire all the necessary people to sell more product, because selling more product directly equates to higher profits.   Anyone who suggests otherwise is either ignorant or intentionally being misleading.

In my business we have added more attorneys the last 2 years.  We did this because we had rising demand for their services, which we sell for a profit.  The amount of taxes we pay on that profit has absolutely nothing to do with the hiring decision -- One has no relation to the other. 

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