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.
Reforms aimed at increasing an economy's flexibility are always hard - and even more so at a time of weak growth - because they require eliminating protections for vested interests in the short term for the sake of greater long-term prosperity.
A single currency entails a fixed interest rate, which means countries can't manage their own currency to suit their own needs. You need a variety of institutions to help nations for which the policies aren't well suited. Europe introduced the euro without providing those structures.
There is a broad consensus, not only in the United States but in most of the world, that if you are in an economic downturn, you need to stimulate. Germany seems to be an exception.
Policy makers should be compelled to take action given the serious costs of long-term unemployment when overall unemployment is already high. A week of unemployment is worse when it is experienced as part of a longer spell.
Mere inflation-that is, the mere issuance of more money, with the consequence of higher wages and prices-may look like the creation of more demand. But in terms of the actual production and exchange of real things it is not.
It is better that a man should tyrannize over his bank balance than over his fellow-citizens and whilst the former is sometimes denounced as being but a means to the latter, sometimes at least it is an alternative.
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