Who are Job Creators?

[AquaMan]

A product or service with no demand will obviously fail. The wealthy can directly employ people but I don't believe that is really the subject here.  Some products will create their own demand, for a while.  Think Pet Rock.  There will always be the basement tinkerers that make it big. Maybe they needed some money to start production, maybe not.  Gates, Jobs, Hewlett & Packard are well known because their success is relatively uncommon.  Person X borrows huge sum of money, makes successful business and employs 45 people does not make the news.  The demand for personal computers was largely created by the presence of easy to use personal computers.  There were small computers before the IBM PC, Commodore/Vic series and the Apple but they were largely relegated to hobbyists and people handy with a soldering iron and screwdriver who were literate in hexadecimal.  My first computer, which dad and I shared, was a Commodore 64.  I don't remember thinking in 1977 that I really needed a personal computer.  I had my HP calculator.  Compared to a slide rule, it was fabulous.

Demand is certainly a requirement for a sustained business.  Demand without a business to supply it will go unsatisfied.  The business to supply it may exist.  If it doesn't, more often than not it will be created or financed by someone not living from paycheck to paycheck.  Are the suppliers all 1%ers?  Obviously not.  Are all the 1%ers only paying 15% on their Federal Income Tax?  Not according to Table 8, http://www.taxfoundation.org/news/show/250.html#table6  Please note some of the brackets that do not include the upper percentages.  Anticipating Heiron, closing down some of the special advantages in getting to the AGI from gross income for the really wealthy would be acceptable to me.  There are some too for "regular" people like the 401K that I use to knock my gross income down by 15%.  While that is available to the rich, it is limited by the number of dollars as well as percentage so it only becomes a small number in the noise for the really wealthy.

Red, the demand for personal computers was existing. It simply was not constructed in the form of those particular "home" computers. The demand was in the form of hand held calculators, electric typewriters, micro-fiche, filing cabinets, compositing machines, adding machines, copiers etc.  The personal computers did not create the demand, they were the result of it.

I also take issue with your characterization of Gates, et. al. being exceptions. In my readings and experience, they are not. Wealthy 1% 'ers simply are not the driving force behind job creation. Its the little guys who are most able to gauge and attempt to satisfy the market because they seldom need or have access to the same resources that a huge corporation uses. They have first hand experience with the market which the corporation has to buy. Many small employers disappear because the larger operations frankly, are more capable of exploiting their ideas. 

"Demand without a business to supply it will go unsatisfied." This also is counter to our experience. Without the micro-chips that run business computers, the consumer would have continued using file cabinets, typewriters, micro-fiche, compositors, mimeographs and adding machines.

The key is the balance of consumer demand and business exploitation. They are both equal.

[TheArtist]

   I can tell someone might listen to that channel that has Rush on it.  Been having to listen to what I consider the "Rush Comedy Hour" and the show thats on around the same time, at the jobsite I am currently working at lol.  This threads subject was part of yesterdays "talk".  I also kept hearing about how Democrats are for Fascism, kind of defined as individuals owning the companies but the government making the choices setting rules, what we can and can't buy, etc. versus socialism I guess which they also rant about.  And also the "Nanny State" where the government knows whats best for us and protects us, etc. But yet soon as I go to the grocery store to by a bottle of wine, those die hard conservatives sure know how to regulate a business and protect me and my family don't they? Regulating pollution hurts businesses and has nothing to do with a persons health let the market decide, etc.  Wine, tooootally different story, regulate and protect away.   And there are probably a dozen other examples one could think of.  Try to get rail started downtown and those conservatives will holler that the gov. shouldn't be in the transportation business.   Haven't heard a peep about the gov. spending over 100million a mile to widen the highway by my house or money to widen yet another intersection in south Tulsa, fill potholes, remove snow, etc.

 I really wish conservatives would follow their own talking points and fundamental beliefs.  But what I see is example after example of them demonizing what someone else may want from the government, but if they want what is essentially exactly the same type of thing from the government, Oh, thats perfectly fine and dandy, it's just naturally the way it should be no questions asked, no outrage here.    

 And here we are locally talking about trash service.  Whats the government doing in the trash business?   Why arent local conservatives, the guys listening to this radio station, up in arms about the government having anything to do with who picks up my trash?  Let the free market decide.  It's like they conveniently ignore some issues that run completely counter to their philosophies and incessantly hammer away at others, and then call the Democrats hypocrits at every turn?

 I am an Independent, so a pox on both their houses lol.

 Morning after pill,,, a blastocyst is human life and should not be harmed or destroyed.  Start talking about how its a few cells etc. and they say "Human life is human life and should not be destroyed or "killed" no matter what" and its a black and white issue no shades of grey allowed.   But again they don't really mean that for if they did, pulling out a molar under those criteria would be destroying human life.  My molar isn't "dog life", it's human and it's alive, but there is no problem with removing it (something thats more fully human, has more cell differentiation, etc. than a blastocyst) and destroying it in a ghastly fashion.  "Oh, no that's not the same thing" they say. But if "I" say somethings not the same thing, I am dealing in shades of grey when things are black and white... Human life is human life...    


 None of us are perfect and surely have some hypocrisy somewhere in what we believe and think.  But these last couple of days listening to hypocrytical people angrily demonize others for being hypocrits, has definitely been an eye opener.  I cant quite decide if its a comedy show or a tragedy. Tragic comedy?

[Gaspar]

  I can tell someone might listen to that channel that has Rush on it.  Been having to listen to what I consider the "Rush Comedy Hour" and the show thats on around the same time, at the jobsite I am currently working at lol.  This threads subject was part of yesterdays "talk".  I also kept hearing about how Democrats are for Fascism, kind of defined as individuals owning the companies but the government making the choices setting rules, what we can and can't buy, etc. versus socialism I guess which they also rant about.  And also the "Nanny State" where the government knows whats best for us and protects us, etc. But yet soon as I go to the grocery store to by a bottle of wine, those die hard conservatives sure know how to regulate a business and protect me and my family don't they? Regulating pollution hurts businesses and has nothing to do with a persons health let the market decide, etc.  Wine, tooootally different story, regulate and protect away.   And there are probably a dozen other examples one could think of.  Try to get rail started downtown and those conservatives will holler that the gov. shouldn't be in the transportation business.   Haven't heard a peep about the gov. spending over 100million a mile to widen the highway by my house or money to widen yet another intersection in south Tulsa, fill potholes, remove snow, etc.

 I really wish conservatives would follow their own talking points and fundamental beliefs.  But what I see is example after example of them demonizing what someone else may want from the government, but if they want what is essentially exactly the same type of thing from the government, Oh, thats perfectly fine and dandy, it's just naturally the way it should be no questions asked, no outrage here.    

 And here we are locally talking about trash service.  Whats the government doing in the trash business?   Why arent local conservatives, the guys listening to this radio station, up in arms about the government having anything to do with who picks up my trash?  Let the free market decide.  It's like they conveniently ignore some issues that run completely counter to their philosophies and incessantly hammer away at others, and then call the Democrats hypocrits at every turn?

 I am an Independent, so a pox on both their houses lol.

 Morning after pill,,, a blastocyst is human life and should not be harmed or destroyed.  Start talking about how its a few cells etc. and they say "Human life is human life and should not be destroyed or "killed" no matter what" and its a black and white issue no shades of grey allowed.   But again they don't really mean that for if they did, pulling out a molar under those criteria would be destroying human life.  My molar isn't "dog life", it's human and it's alive, but there is no problem with removing it (something thats more fully human, has more cell differentiation, etc. than a blastocyst) and destroying it in a ghastly fashion.  "Oh, no that's not the same thing" they say. But if "I" say somethings not the same thing, I am dealing in shades of grey when things are black and white... Human life is human life...    


 None of us are perfect and surely have some hypocrisy somewhere in what we believe and think.  But these last couple of days listening to hypocrytical people angrily demonize others for being hypocrits, has definitely been an eye opener.  I cant quite decide if its a comedy show or a tragedy. Tragic comedy?

Actually, the post was started based on a subject that has lit up Twitter and Youtube for the past couple of days.  It's a video of Harry Reid on the Senate floor.

I do not listen to Rush, but I don't doubt that he has probably been all over this.

[heironymouspasparagus]

None of us are perfect and surely have some hypocrisy somewhere in what we believe and think.  But these last couple of days listening to hypocrytical people angrily demonize others for being hypocrits, has definitely been an eye opener.  I cant quite decide if its a comedy show or a tragedy. Tragic comedy?

How have you managed to avoid this at work for all this time?  I have spent decades with those kind of people...dealing with that crap.

Yes to your comment about both sides.  The left can be just as bad.  They just aren't as effective, so not as big a threat.

[nathanm]

10 minutes to respond?  You must have been otherwise occupied.

Yeah, one of my dogs decided Saturday that a can of Coke would fit really well on my laptop's keyboard. The laptop was not amused.

Using my HTPC and living room TV is not a terribly pleasant way to compute, so I've been scarce, seeing as how it's unpleasant enough just getting work done. But you know me, I can't resist seeing what everybody is up to.

[nathanm]

And on the topic, here's why Reid's statement isn't as off-the-mark as Gaspar claims: Despite all the talk about small business, the reality is that most people in this country are employed by gigantic corporations. The vast majority of firms (over 75%) don't employ anyone. Those ten-to-nineteen person businesses? There are (were in 2007) a hair over a million of them in the US, and they employed 7 million people, out of a total of 120 million. A drop in the bucket.

That's not to trivialize their contribution by any means. I think that a society with fewer mega-businesses and more small businesses is likely to have better outcomes as far as income distribution and class mobility. They are the people for whom single payer health coverage is most vital. Rush claims to support small business, but oddly enough, he's OK with the tax code favoring people higher up on the income ladder. He's OK with the tax code favoring capital gains over real work and real production. So too, seem to be most of the newly-elected Tea Partyists. Small business is a prop for the Republican party, nothing more.

[guido911]

I'm one.

[nathanm]

Guido, you and the rest of the under-100 employee set employs a grand total of 20 million people, or about a fifth of all employees, despite being over 60% of all businesses with payroll. It's an important contribution, and it would be nice to grow it. However, that's not really where the jobs are, in the main.

I'd love to see capital gains (aside perhaps on one's primary residence) treated as normal income and otherwise fix the distribution of taxation. It's not right that you pay a higher percentage of your income in tax than CEOs making tens of millions or more a year, just as it wouldn't be right for someone making $20,000 a year to pay as high of a percentage as you do.

[Red Arrow]

Red, the demand for personal computers was existing. It simply was not constructed in the form of those particular "home" computers. The demand was in the form of hand held calculators, electric typewriters, micro-fiche, filing cabinets, compositing machines, adding machines, copiers etc.  The personal computers did not create the demand, they were the result of it.

That's like saying the demand for automobiles existed because there were horses and buggies.  Not entirely wrong but stretching a bit. 

I also take issue with your characterization of Gates, et. al. being exceptions. In my readings and experience, they are not. Wealthy 1% 'ers simply are not the driving force behind job creation. Its the little guys who are most able to gauge and attempt to satisfy the market because they seldom need or have access to the same resources that a huge corporation uses. They have first hand experience with the market which the corporation has to buy. Many small employers disappear because the larger operations frankly, are more capable of exploiting their ideas.

I'll agree that a lot of really good ideas come from the little guy.  Large corporations frequently stifle innovation.  Jumping from an idea to mass production usually takes money.

"Demand without a business to supply it will go unsatisfied." This also is counter to our experience. Without the micro-chips that run business computers, the consumer would have continued using file cabinets, typewriters, micro-fiche, compositors, mimeographs and adding machines.

I see we are not communicating again.  The next two sentences were intended to say that either a business exists or would be created: "The business to supply it may exist.  If it doesn't, more often than not it will be created or financed by someone not living from paycheck to paycheck."

[Red Arrow]

Yeah, one of my dogs decided Saturday that a can of Coke would fit really well on my laptop's keyboard. The laptop was not amused.

Using my HTPC and living room TV is not a terribly pleasant way to compute, so I've been scarce, seeing as how it's unpleasant enough just getting work done. But you know me, I can't resist seeing what everybody is up to.

I assume the can of Coke was open and dispersed its contents on the keyboard.   

Laptop repairable?

[nathanm]

I assume the can of Coke was open and dispersed its contents on the keyboard.   

Laptop repairable?

Your assumption is correct.

So far, the laptop isn't responding to my ministrations, sadly. Right now it's in pieces. Somehow, it's a lot harder to get things back together than it is to get them apart, even when you have a manual to tell you what to do.

[Red Arrow]

Somehow, it's a lot harder to get things back together than it is to get them apart, even when you have a manual to tell you what to do.

Shoulda bought an automatic.   

[Red Arrow]

I'd love to see capital gains (aside perhaps on one's primary residence) treated as normal income and otherwise fix the distribution of taxation. It's not right that you pay a higher percentage of your income in tax than CEOs making tens of millions or more a year, just as it wouldn't be right for someone making $20,000 a year to pay as high of a percentage as you do.

I see you have a special interest.  Capital gains are capital gains.  If you are wealthy enough to own a home and make a profit when you sell, you are no different than someone investing in, say, the stock market. You need to pay the income tax.

I know you found the tax info based on AGI.  Do you have something definitive based on gross income and how it gets to AGI.  I am assuming you will look for something non-partisan like the Tax Foundation info you found that indicates that the top 1% average paying about 24.28%, the top 5% average 20.46% and the top 10% average 18.05% but notice that between the top 5% and top 10% only average 11.36%  of their AGI.  It only goes downhill from there.

[nathanm]

Someday those nanobots will be in everything. Until then...

RA, the reason I would exempt capital gains from sale of one's primary residence is that there is a large social good that comes from having a highly mobile workforce. It allows people to move to where the jobs are without a major financial penalty. Cap the exemption or limit the exemption to the amount rolled into one's new residence or something if you're concerned about people getting an advantage in excess of that which is beneficial as public policy.

The Wikipedia article appears at first glance to be reasonably correct:

Gross income is reduced by certain items to arrive at adjusted gross income.[3] These include:
    Expenses of carrying on a trade or business including most rental activities (other than as an employee)
    Certain business expenses of teachers, reservists, performing artists, and fee-basis government officials,
    Health savings account deductions,
    Certain moving expenses,
    One-half of self-employment tax,
    Allowable contributions to certain retirement arrangements (SEP IRA, SIMPLE IRA, and qualified plans) and Individual Retirement Accounts (IRAs),
    Penalties imposed by financial institutions and others on early withdrawal of savings,
    Alimony paid (which the recipient must include in gross income),
    College tuition, fees, and student loan interest (with limitations and exceptions),
    Jury duty pay remitted to the juror's employer,
    Domestic production activities deduction, and
    Certain other items of limited applicability.

AGI is the appropriate measure. Using gross income would understate the effective tax rate of those with schedule C income. Where it all falls apart is that stock compensation gets treated as long term capital gains as long as the stock is held after exercise of the option. Even using the logic of the present rules, that's just wrong. At the very least, the spread between the strike price and market value at exercise should be taxed as wage income no matter when the stock is sold. That's why you find the top 0.1% paying less (as a percentage) than lower groups. I don't know how much of a difference it would really make, but it's pretty ridiculous that those at the top can shift wage income to capital gains so easily.

[Red Arrow]

RA, the reason I would exempt capital gains from sale of one's primary residence is that there is a large social good that comes from having a highly mobile workforce. It allows people to move to where the jobs are without a major financial penalty. Cap the exemption or limit the exemption to the amount rolled into one's new residence or something if you're concerned about people getting an advantage in excess of that which is beneficial as public policy.

Keep in mind that I actually agree with the exemption for capital gains on a primary residence but....
I don't agree that it is necessary to exempt capital gains on a primary residence to have a highly mobile workforce.  Being able to sell a home for what you paid for it is a plus in itself.  The profit (gain) is what is taxed.  Trying to channel the liberal that is not really in me, why shouldn't you share your good fortune (profit portion only)  of selling a home at a profit?

The Wikipedia article appears at first glance to be reasonably correct:

AGI is the appropriate measure. Using gross income would understate the effective tax rate of those with schedule C income. Where it all falls apart is that stock compensation gets treated as long term capital gains as long as the stock is held after exercise of the option. Even using the logic of the present rules, that's just wrong. At the very least, the spread between the strike price and market value at exercise should be taxed as wage income no matter when the stock is sold. That's why you find the top 0.1% paying less (as a percentage) than lower groups. I don't know how much of a difference it would really make, but it's pretty ridiculous that those at the top can shift wage income to capital gains so easily.

We have an Employee Stock Purchase Program where I work.  We use after tax dollars to purchase stock.  We used to get a 15% discount from market price but in order to punish the rich, now even the rest of us only get a 5% discount.  I can sell right away but pay ordinary income rates if I sell before 1 year.  After one year, I get 15% capital gains rates.  Since I have to buy stock with after tax dollars, I could go along with the top execs having to pay ordinary wage rates based on some value at the time the stock is issued.  A discount, but no more than available to everyone (like me), would be OK.  Then either short term or long term would apply on gains/losses based on that value. (That might be what you said but I'm not sure.)

Please see Table 8.  The top 0.1% paid less from 2004 to 2008 than the top 1% but even at the top 5% level, the top 0.1% paid a higher average rate.  Other years, including 2009, the top 0.1% paid the top average rate. http://www.taxfoundation.org/news/show/250.html#table6  I understand that average means that someone paid less but it also means someone paid more.  I would like my discount returned to 15%.