Friday, April 01, 2011

Tax Cuts Raise Dividends - Sales Make Jobs

Cuts in corporate taxes pump up dividends. The benefits fall through to the bottom line first. Then profits go up, dividends go up, and stock prices rise. Tax cuts don't make jobs.

Jobs are made when orders come it. Sales makes jobs. And for sales to happen, the customers need to be 'open to buy'. Money must be present in the economy.

If I sell ten thousand swivets, I take the order to the bank, get a loan, hire, fill the order, and then lay off my people until the next order comes in. Tax cuts don't sell swivets, except in the very general sense that money coming from the government feeds the economy. Salesmen sell swivets. Sales create the need for employees. Sales create jobs.

Worse, the act of boosting stock prices by giving tax cuts cannot be a way of life. There can't be tax cuts year after year. Not unless we want to see government subsidizing all of capitalism. Right now, General Electric pays no federal taxes and in fact gets a large tax rebate. The IRS pays GE money at tax time.

Your taxes are paying GE to be a Successful American Company. This makes it a hobby business. Your hobby business.

Tax cuts can help a business retire debt. Help a business rent a larger space. Help a business do research and development. Help a business raise its dividend. But it is sales that bring in orders for product.

Orders for product create jobs.

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