Ever since the 1980s we have been told that giving tax breaks to the rich would boost the economy; that it would create jobs. We have been told we must create a corporate-friendly environment, get rid of regulations, and give incentives to companies to outsource American jobs.
For thirty years we have been sticking pins in this “Voodoo Economics” doll, hoping the politicians who implemented these policies knew what they were talking about. To be fair, it wasn’t completely their fault. Billions of dollars have been spent to influence and lobby on behalf of corporate interests. The thinking behind this is that corporations are “people” (made up of stockholders like you and I), and what is good for a corporation must be good for America.
Of course a corporation is just a mindless entity–neither good nor bad–whose sole purpose is to make a profit. If a company profits, the stockholders profit, and that is good for America, right?
Not necessarily. A company can outsource jobs and save labor costs; this profit may be passed on to the stockholders. If the consumers of their product are Americans, and more Americans have lost their jobs or have been forced into lower-paying positions, then their target audience will have less disposable income (which translates into decreased profits).
To say it another way: a prosperous economy requires a prosperous middle class. It is not the rich who are buying lampshades and Tupperware. This is why tax breaks for the rich have never created jobs, nor will they ever. Demand for products or services create jobs, and to have that demand your consumers need disposable income. The middle class are the real job creators, and by allowing wealth to trickle up instead of down, we are killing our consumer base. It really is just that simple.