Job Creation is So Taxing

If I hear “Did you ever get a job from a poor person” again, as support for cutting the tax rates of those who make over $250,000/year; I may puke, literally.  This argument is so easily unwound in todays’ recessionary environment that it belies the continued use in political and media circles.  I think it discredits the voices who shout it.

First, a little background on the disparity between the concentrations of wealth between what we consider the rich and the poor.  This isn’t a tax argument, simply a factual discussion.  During the Great Depression, the top .01% of earners brought home 872 times the income of the bottom 90%.  Immediately preceding the GD, those super-wealthy saw about 225 times the income.  At least in the Depression, the poor got slammed and the wealthy got, well, wealthier.  Just after, with the introduction of corrective legislation and tax adjustments, the gap returned to tighter range of about 190.  That lasted until Reagan.  Every year, EVERY year, since Reagans Oath of Office, the gap has widened.  Today, in the middle of the second largest economic downturn in our country’s history, the gap is almost 900.

Looking at the most recent six recessions:

                Recession Start                 Gap        Peak Job Decline

                July 1974                              200         (2.75%)

                March ’80                            225         (1.25%)

                July ’81                                 225         (3.10%)

                June ’91                               350         (1.40%)

                Feb ’01                                 775         (2.00%)

                Dec ’07                                 900         (6.00%)

Is it fair to conclude that recessionary periods are accompanied by significant job loss AND a greater concentration of wealth at the top income earner levels?  As a side note, the recession years of 1980, 1981, 2001 and 2007 are years also accompanied by tax cuts predominately aimed at business and high-income earners.  You know them, the people that create jobs.  In this environment, where the rich are becoming much richer...shouldnt we be seeing a large increase in employment?  After all, no one got a job from a poor guy, right?

Jobs are not created by small business.  Small businesses employ most of our workers.   In my opinion, that is a substantial difference in view.  Additionally, the Rich are not creating jobs – in fact, they get richer while lower income earners actual lose employment.  The argument easily fails.  The real answer is the consumer.  Consumers create jobs, plain and simple.  Small businesses hire because they have buyers – or consumers.  We are a 70% consumer driven economy. Doesn’t it make sense to focus help and tax incentives on the people driving this economy, the middle class, the bottom 90% of earners?  Doesn’t it make sense to create more people able to consume, to make small businesses need more people, to hire to fill the service demand?  Doesn’t it make sense to start at the source instead of the top?  Editorial note: can you believe the bottom 90% are at most "Middle Class"?

Asked another way, are you a customer of mine because I am wealthy?  Or, am I wealthy because you are my customer.  Even a Republican can answer that.