DrHobo said:
So duPont, in order to maintain a consistently high profit margin, laid off your father... and that is the government's fault how?
Large corporations should be taxed heavily, especially those that are benefiting from years and years of tax payer funded infrastructure.
I'm not sure where these mentality of 'large corporations rule' comes from. Large corporations got that way by feasting on the ideas and methods of smaller corporations and gorging themselves until they become so bloated and unstable that they eventually collapse, lay of 15% of their employee's and blame the govt.
In short Govt rules... small corps and individuals rules... big corps fail.
I'm not quite sure where you got the idea that if gov't rules, then individuals rule. That isn't the case. Large government has never led to success of individuals or small corporations. The more government interference in business; the more difficult it is to run a business. The problem with huge tax rates on large corporations is that, once they're taxed out of business, who's left to tax? The smaller corps and, when they're gone, the individuals. High taxes are never the answer to fiscal problems. Lowering taxes is one of the answers to beginning and sustaining financial recovery. Eliminating unnecessary and unneeded government programs is another. Encouraging people to learn how to manage their money responsibly is another.
I'll say this again. There is nothing wrong with a business making money or the owners of the business keeping wealth accrued from running a successful business. The point of starting and running a business is to make money. Government receives more money when it lowers taxes because more taxes are paid. Let me say that again. Government receives more money when it lowers taxes because more taxes are paid.
When taxes are high, businesses do the only logical thing to keep afloat. They raise prices on their products and cut labor force to maintain a workable profit margin. No, it's not good for the employees, but the owners have to do something to attempt to stay afloat. So, consumers have to pay more for products that they once could afford. They cut back their spending to items of necessity instead of items of luxury. This means that government makes less money in taxes because less is being spent. The natural inclination of many in government who have forgotten basic economics is to raise taxes so that they can get the money flow back up to where they want it to be. So, prices are raised again, more are laid off, and taxes go up again until a financial failure happens that is much worse than the simple one we're facing is.
When taxes are low, supply and demand determine more of the price of a product than tax rates do. When a person has more of their income to spend, they spend more of their income. The same is true of businesses. If a business is only paying 20-30% of it's income in taxes, it has more money to invest in expansion, hiring new employees, affording better health care programs than the government can supply, and paying its employees more. If it's paying 70%+, a business owner WILL cut those back. The owner may not like it or want to do it, but he will to survive. When businesses spend more of their money, consumers spend more of theirs.
Are there bad practices? Sure. When bad practices happen, then the irresponsible party will pay the price. Again, that's part of basic economics. If it's bad spending practices on the part of the consumer, then he or she will go bankrupt. If it's bad spending practices on the part of the business, then the business goes bankrupt. A bad government practice is throwing away money on irresponsible businesses or individuals. Do it too often and, no matter how much it taxes companies with good practices, it will soon run out of money.
To the original topic, I'd like to be pleasantly surprised by Obama. But, he's already having to backpedal on a lot of his campaign ideas by offering tax cuts instead of tax hikes. There is no way he can raise taxes the way he was declaring he would on the campaign trail and be successful. We'll see in 6 months time how successful he is. Then let's comment on him.