Nick Hanauer is one of those entrepreneurs and venture capitalists who should not be taxed according to many because they create so many jobs. Hanauer was an early investor in Amazon and founded a company that was eventually taken over by Microsoft for a cool 6.4 billion. However, Hanauer says that being rich he should be taxed and that it is not he who creates jobs.
Entrepreneurs and venture capitalists can only be successful if they create products for which there is demand. The demand comes mostly from the middle class. Perhaps the Occupy groups would say the 99 per cent at least.
While Hanauer admits that it is true that one needs creative entrepreneurs and investors to have a growing capitalist economy he points out that without consumers there would be no entrepreneurs and investors. Those creative entrepreneurs need people to buy their products before they will get anywhere and before they will create jobs.
Hanauer notes that since 1980 the top one tenth of one percent of Americans have seen their incomes rise by 400 per cent. The bottom 50 per cent have seen a decline of one-third. Making the rich, richer will never produce a situation where there will be enough demand to power the U.S. economy and create more jobs.
If the average U.S. family received now what they received in 1980 they would have 13,000 more to spend. This would mean more jobs as businesses geared up to make products to satisfy that demand.
But what is happening in the U.S. are policies that put less in the pockets of the average family as the rich are made richer meaning that there is also less demand. The slogan should not be: Don't tax the rich because they create jobs but Tax the rich and create jobs. For more see this article.