When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer.
Interpretation
The quote criticizes a tax system that disproportionately benefits the wealthy under the guise of job creation.
Nick Hanauer highlights the flaws in a tax structure that favors the rich by offering exemptions and low rates. He argues that instead of fulfilling the promise of job creation, such policies essentially enhance wealth inequality, allowing the affluent to accumulate even more wealth without generating the expected economic benefits for the broader populace.
In practice
This quote can be used in a debate about tax reform policies.
The most powerful forces in economics are not numbers or facts. They are prejudices and preferences. No amount of evidence will ever change the degree to which many of the rich and powerful prefer themselves to be richer and more powerful and others poorer and weaker.
Raising the minimum wage allows business people to stop thinking about workers simply as costs to be cut and allows you to start thinking about workers as customers to be cultivated.
The most insidious thing about trickle-down economics is not the claim that if the rich get richer, everyone is better off. It is the claim made by those who oppose any increase in the minimum wage that if the poor get richer, that will be bad for the economy. This is nonsense.
You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It's not if, it's when.
The thing I've learned most about poverty is how expensive it is to be poor. It's super easy to pay rent every month if you earn enough to pay rent and have a decent job. It's super hard to pay rent if you need a coupon from the state and then need to go find an apartment that will accept that coupon and only that coupon.
If low taxes were the way that people like me created wealth, then we'd be starting our companies in the Congo or Somalia or Afghanistan, but we're not. We come to places where there are lots and lots of customers.
All systems are capitalist. It's just a matter of who owns and controls the capital -- ancient king, dictator, or private individual. We should properly be looking at the contrast between a free market system where individuals have the right to live like kings if they have the ability to earn that right and government control of the market system such as we find today in socialist nations.
Political economy came into being as a natural result of the expansion of trade, and with its appearance elementary, unscientific huckstering was replaced by a developed system of licensed fraud, an entire science of enrichment.
The culture of self-gratification and deregulation that began during the Clinton years and continued under President George W. Bush led to the bursting of one stock market bubble at the turn of the century and a full-scale financial crash less than a decade later.
The first step to prescribing the right medicine is to recognize the cause of the illness. And, when it comes to what is ailing the global economy, extreme monetary easing has been more cause than cure. The sooner we recognize that, the stronger and more sustainable the global economic recovery will be.
There is no easy fix or youth unemployment. Partnership between the public and private sectors can make a big difference.
People who think a tax boost will cure inflation are the same ones who believe another drink will cure a hangover.
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