Reader discretion advised: This article contains adult language and psychological nudity.
I don’t care who you are, or how patriotic you may be. If you find out your business can be 20 percent more profitable if the production facility is located in India, you are going to send it there. Sadly, this has caused more jobs to be sent overseas instead of providing jobs in our own country.
Barack Obama states it clearly in his comprehensive economic plan: “Barack Obama will repeal tax breaks and loopholes that reward corporations that retain their earnings overseas.” His intention is to keep new companies from doing so, but what about the companies that already send jobs away? They will be forced to raise their prices on consumer goods even higher than they are now. Raising taxes on businesses that send work overseas is not incentive for them to stop doing it. It just raises their prices.
Not only does Obama want to raise taxes on people and businesses that he says, “Can afford it,” but he also wants to raise the minimum wage. Yet again, well-intentioned but will cause more jobs to be shipped overseas where workers’ wages are lower.
If you understand the basics of economics then you know a dollar bill is worthless. It simply represents worth. For example the minimum wage is $5.25, if you raise it to $9.50, (as Obama has promised to do as president) will the employees work harder? No. They will work the same way. Is their labor suddenly worth more? No. It is still worth one hour of introductory labor. So all that is happening is now 9.5 of these arbitrary pieces of paper represents an hour of introductory labor. You’re not really paying them more once the market adjusts. The labor is the constant and the dollar bill is the variable; its represented worth is what changes. So all prices, in all industries, go up and our dollar is worth even less than other world currency. That’s bad for everyone, even the people who just got a $4.25 per hour raise. Especially since the immediate effect is half of those employees earning minimum wage just lost their jobs since the companies they work for won’t be able to afford staffing them until the market economy adjusts to the dollar bill’s downward spiral.
Obama said April 16, during a debate with Hillary Clinton, that he thinks we need to raise the capital gains tax to 28 percent. Capital gains is profit on the investments that help out country and economy grow such as the stock market, growing companies and other investments. These investments help our economy and our country.
So add Obama’s plan to raise the minimum wage to seemingly help out the middle class in the short run. Add putting higher taxes on businesses that send labor overseas, raising the capital gains tax. You get inflation. Anyone who understands the fundamentals of world economics knows the recipe for inflation is very simple and Obama has it down to a T.
“98% of small businesses make less than $250,000 a year” said Barack Obama on Oct. 17, while explaining that his tax increases will affect few and his tax decreases will affect many. Now imagine a business that makes signs. The business does $250,000 a year in revenue. They have a profit margin of 30 percent. Which is $83,000 after paying for supplies. They have only two employees who are co-owners, which would take 20 percent out for payroll taxes. Each employee makes about $30,000 per year. Obama wants to tax these businesses more in the name of raising money to give tax credits to the middle class? Do you know what would help out the middle class more than a $2,000 tax credit? A job, because he just put this company out of business. Think this scenario is hypothetical and unrealistic? I just described the financial structure of a company I worked for last year.
Do rich people spend money? Obama states clearly in his comprehensive tax plan that he wants to raise taxes for anyone making over $250,000 per year to 39 percent. That is taking $93,000 per year out of their paycheck. Consumer sales are low in this economic downturn. Yet he wants to raise the taxes of the people who do the most spending to 39 percent? There is a term for people who make that much money. They are called the investing class. They invest money into developing companies, the stock market, scientific research and charitable organizations. Keep raising their taxes and you’re not only going to see more jobs shipped overseas, but more companies headquartered overseas because it will soon become more profitable for business owners to run businesses out of countries with lower tax rates, such as Costa Rica.
You can raise and lower citizen’s taxes in the name of helping the middle class all you like. But the only thing that will help the middle class is a vast abundance of jobs and the only thing that creates jobs is incentives to do so. People will do what is in their best interests, middle class, lower class and upper class. Make job creation in everyone’s best interest and our country thrives.
Now, I’m not a huge fan of John McCain, but he has focused his campaign on cutting government spending so it is possible to lower taxes in this economic downturn rather than raise taxes for some, to give money to others in the name of ‘helping the middle class.’ The middle class needs jobs, not a handout.