now that`s a twist-please address how invalid this maybe

[kimba1]

http://truthout.org/actually-rich-dont-create-jobs-we-do/1305380742

[Xavier_Onassis]

Well, this is accurate, except for what he says about Atlas Shrugged.

    Perhaps the most vivid description of what happens to a society where the parasites become so numerous and powerful that they destroy their productive hosts is Ayn Rand’s classic novel “Atlas Shrugged.” ...

 What happens in Atlas Shrugged is that the creative people, who are also tycoons, go on strike and deprive the proles of their genius, wages and benefits, and live in "Galt's Gulch" until a speech by John Galt, who invented an engine that runs on ambient static electricity, convinces the country in one speech, that he is right and all the evil FDR-lovers are wrong. Then everyone recognizes that "It's Morning In America" and the book closes with a happy ending.

I am not sure I would call "Atlas Shrugged" a classic novel. Perhaps a popular novel, maybe a classic thousand page screed.

Rand, by the way, did not show that she believed in capitalism. She did, it is true, had cigarettes made with dollar signs on them and smoked them until she contracted cancer. But she did not invest. Not in shiny wondrous blue "Reardon metal", not in cars that ran on static electricity, not in Xerox, Polaroid, IBM, Kodak, DuPont, Brillo, LIquid dish detergent, synthetic rubber, plastics, Coca-Cola, nothing. She kept her money in a bank passbook, and when she was old and ill, she signed up for Social Security and Medicare. Yay, Ayn.

Getting back to the main point: rich people can build companies that make wondrous things. They can invent Segways. But for Segway manufacture to create a lot of jobs, a lot of people have to buy a Segway. It seems to me that Segways probably did not create a lot of jobs. One could make a lot more with a much cheaper innovative skateboard, I am sure.

[BT]

Just more class warfare rhetoric from the other side.

The author does have a point that consumers drive demand, but investors provide the capital to meet that demand.

Think about it. Ford doesn't sell direct. They sell to dealers, who buy the product wholesale and then turn around and sell to the end user. So the jobs created by the demand for a Ford happen at two levels, manufacturing and the dealerships. And that in turn creates jobs in the secondary markets for parts accessories and repair. At each step in the chain money needs to be invested to be able to provide the goods or services that that one car sale triggers.

Investors do not have to be rich to invest, but they do need to be able to afford the loss of their investment, which the poor usually can not afford to do, what with being concerned with more immediate needs like food, shelter and clothing.
 

[Plane]

Investors do not have to be rich to invest, but they do need to be able to afford the loss of their investment, which the poor usually can not afford to do, what with being concerned with more immediate needs like food, shelter and clothing.

   The rich need to invest, the middle class might or might not , the poor are not likely to invest .

So is there a social requirement for the rich?  Would there be enough investment without them?

[BT]

Would there be enough investment without them?

Possibly if you include institutional and pension investments.

[Plane]

Would there be enough investment without them?

Possibly if you include institutional and pension investments.

Looks like neither of us have measured this , how would we know what "enough " is?

Arn't institutions uniformly conservative investors?

Do we need a few gamblers?

[BT]

I think it smart business to let your capital work for you, whether it be in real estate or the stock market.

[Plane]

Would less capitol gains tax be a social good or a loss to the government?

[BT]

Would less capitol gains tax be a social good or a loss to the government?

Those are good questions. But doesn't it depends upon our expectations of our government as to realistic revenue requirements?

[Xavier_Onassis]

There is an ideal rate of taxation, perhaps. If the rate is raised, revenue will be less and if it is lowered revenue will be raised as well. It is the economic equivalent of finding a balance point.

This is likely to vary depending on the economic climate, and certainly depends on tax rates in other places and ways by which taxes can be avoided profitably for the investor.

[BT]

or you tax income as well as capital gains at one low flat tax rate.

[Xavier_Onassis]

The government costs too much for one low tax rate.

I don't see why capital gains should not be taxed the same.

I am opposed to a flat tax. Taxes should be progressive, I believe.

[BT]

Taxes should be progressive, I believe.

Why?

[Plane]

Would less capitol gains tax be a social good or a loss to the government?

Those are good questions. But doesn't it depends upon our expectations of our government as to realistic revenue requirements?

Not absolutely.

We could quite possibly expect more from the government than our taxes could support , without being ruinous to the economy that the tax base depends on. If we have expectations in that range they won't be met and harm will result from the attempt.

[Plane]

history has taught the lesson that great wealth opposes democracy, so democracy must oppose the accumulation of great, disproportional wealth

I wish that the author had included refrence for this , I am absolutely ignorant of the history that has taught him this.