Fred Smith, the CEO of FedEx may have earned a few brownie points this week. It took him 44 seconds to dispel the misinformation that increasing the tax rates on the top two percent would kill jobs.
Smith said: “There is a lot of mythology in Washington such as its small businesses that creates all of the jobs in the United States and if you raise the rates on the top 2% you’ll kill jobs”
Listen to the entire snippet below.
Such a statement coming from inarguably a very competent and successful businessman that created an innovative company like FedEx is powerful. It gives weight to President Obama’s balanced approach for achieving budgetary fiscal responsibility.
Before elevating Mr. Smith to “fighter for the middle class”, it is important to delve further into his interview. Listening to it makes it evident he is willing to throw all individual taxpayers overboard to ensure that corporate tax rates are lowered.
Smith said: “If I were designing a tax policy for the United States it would be to lower corporate tax rates …. and then you do what you need to do in terms of personal tax rates across the board or at the upper end ..”
Here is the snippet.
One should note that as CEO of FedEx, Mr. Smith is opposed to his drivers and other employees sans pilots unionizing. He vehemently opposed the correct reclassification of his truck drivers to be properly governed under the National Labor Relations Act (NLRA) as opposed to the Railway Labor Act (RLA). In fact during the FAA Reauthorization Act debate, he opposed section 806 that would have made that appropriate change. More disconcerting is that he ran deceptive commercials, op-eds, and threatened to cancel aircraft orders in opposition to the bill.
While Mr. Smith’s display of intellectual honesty with regards to the effects of upper income tax rates is important and to be commended, his actions indicate he is foremost a laissez faire capitalist. These types of CEOs are generally effective in giving the impression of being on the side of the working middle class, even as they are deceptive in their support for policies disadvantageous to the middle class.
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A majority of jobs in the U.S. are created by small businesses. An overwhelming percentage of small business owners do not fall into the 2%, thus increasing top marginal rates would have little effect on them. Smith is, in effect, arguing in favor of keeping capital gains and investment income rates low. That’s how he makes his money. He’s advancing his own myth in a way that’s most advantageous to himself.
It seems the author here is as incompetent as they come. Nobody is getting throw overboard if we tax capital gains and dividends at one’s marginal tax rate or tier it with perhaps even higher tax rates. Our system of taxing corporations does not make sense. It does not encourage business growth which leads to investment in things that can expand the economy as a whole. None of this is laissez faire and such a tax change would at least in the short term REDUCE someone such as his take home income.
It would be best for this author to not speak or at least save his opinion for things he at least in some way understands.
Dustin incompetence and I would contend insanity is when you do the same thing over and over again and expect a different result. If your fantasy was true then we should be booming with jobs and economic activity for the masses given our current “effective” rate of taxation on corporations and the wealthy. The fact is that mathematics and human behavior reigns. The marginal propensity to consume of the wealthy relative is small compared to the middle class. As such hoarding income and wealth is causal in our level of economic activity. You unable to see this shows your incompetence my friend. Even the wealthy understands this. Their reason for wanting the status quo at this point has less to do with further increased in wealth and more to do with maintaining power by creating an uneducated “dependent on the wealthy” underclass.
Take you colored glasses of and work for a solution instead of staying in a state of suspended animated ignorance.
Egberto, I know mathematics is hard for you, as is human behavior and incentives. Where do you think the taxation on corporations ultimately ends up at? It ultimately gets paid by consumers who buy from those businesses that pay the tax. So when taxes on business goes up, prices go up for everyone. That increase in prices makes everyone less able to afford the things they need.
Dustin is right, We are not seeing the usual growth as we saw in the 80’s because of several factors, nearly all have to do with government. Business will not work to expand if it sees a constant threat of increased taxes and regulations. In the 80’s tax rate cuts were set in stone with no expiration, and regulations were rolled back instead of piled on. With such certainty, the GPD boomed peaking at 9% and averaging nearly 6% for the rest of the decade.
I find your image of the wealthy laughable and usually wrong. Most of the wealthy spend much more than the middle class per person. They also tend to hire extra people on top of the business they usually run. They also are prolific givers to charity, being that 2% give nearly 60% each year.
The real key to what liberals like Egberto think of our economy is that it’s a static limited pie that if someone gets rich, it’s off of someone else who then becomes poor because of it. I’m not sure why liberals are only able to think statically instead of what reality is, which is dynamic and can expand. I’m not sure why liberals can’t understand how people react to rewards and punishment when it comes to economics and government policy. For too many times the liberals I have debated deny reality over and over, even when it’s documented history.
Perhaps, one day Egberto, you will understand reality as it really is, instead of trying to push it into the Utopia you think it should be.