Is Taxing The Rich A Good Idea? Yes!

The most interesting thing about our current political debate on fiscal policy is that not only Warren Buffet, but the most successful stock market investors (speculators, if you will) all say that the best way to insure the prosperity of the rich is to insure the prosperity of the middle class.

Don't believe me? Check out this article by Nick Hanauer, a venture capitalist who has started more than twenty companies, including Amazon.com. He says, "I’ve never been a “job creator,”  going on to explain: "I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate."

Actually, that sounds a lot like Henry Ford, who recognized that if his workers couldn't afford to buy his cars, his enterprise would be in trouble. Accordingly, he paid his workers more than the prevailing wage.


Hanauer drives the point home: "That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be."

In case you still don't agree, he amplifies the point: "When businesspeople take credit for creating jobs, it is like squirrels taking credit for creating evolution. In fact, it’s the other way around.

"It is unquestionably true that without entrepreneurs and investors, you can’t have a dynamic and growing capitalist economy. But it’s equally true that without consumers, you can’t have entrepreneurs and investors. And the more we have happy customers with lots of disposable income, the better our businesses will do.
That’s why our current policies are so upside down. When the American middle class defends a tax system in which the lion’s share of benefits accrues to the richest, all in the name of job creation, all that happens is that the rich get richer."

"And that’s what has been happening in the U.S. for the last 30 years."

The Occupy Wall Street movement has finally figured it out.