No, they aren't. Anyone who has studied economics would be wary of such a sound bite. Depending on what economic model you adhere to, eminent economists differ widely on their predictions of the overall macroeconomic effects. I particularly want to see data and research supporting the contention that tax cuts for the well-off will result in significant job growth. If Bill Gates pays less taxes, is he personally going to go out and hire more people, and can this be quantified? If my dentist already has a full patient load, is he going to go out and hire more hygienists with his tax savings? Will private enterprise and private charities benefit from increased revenues, or are these tax savings just stuck into personal savings somewhere?
If it is claimed that these tax cuts will be of economic benefit, I would like to see the research underpinnings of such a contention so I can make up my own mind. Sound bites from either the left or the right seem to be lacking such foundations. I wonder if the GAO or other such organizations has published any research on this; I am not finding anything yet.
My reply is a bit long, so let me give a short summary: the question we should really be asking is, "How would higher tax rates on the wealthy help anyone?" If govt. gets all this money that some wish to tax from Bill Gates, how will it manage this money more beneficially than Gates would do himself? How do we gain by taking additional money from Bill Gates, and directing it into govt. hands?
I'm not sure what "sound bite" you refer to, but I'd like to apologize for a mistake I made in my last post. I'll correct that in a minute. Right now, let's clarify again that no tax cut is in view here. The choice placed before us is an extension of current tax rates, or an increase for some (or all) tax brackets. So you've got the questions backward, as many of us do, on both sides. No in-depth, third-party analysis is needed to see that, just a little clarification we can take care of in house.
Having gotten that out of the way, you've asked about two possible risks, should we fail to extend current rates on all tax brackets. First, (turning your question around for you) you question whether the wealthy will really be directly hiring fewer people, if we tax them at a higher rate. Turning the second question around, you asked if higher taxes will mean a reduction in charitable giving, or investment.
To begin to answer these questions, we could start by realizing that those are only two risks; there are others. For example, if Bill Gates pays more taxes, he has other options besides firing his own employees, or just instituting a hiring freeze. The tax hike may contribute to higher prices for Microsoft products and services, which could raise operating costs at businesses the world over. Which could lead to fewer purchases of new software from Microsoft, reducing profits, reducing the taxes govt. gets from Microsoft in the first place. Higher taxes, especially with lower profits, could mean that Gates invests in fewer businesses, that might have hired additional employees. Or Microsoft may tighten budgets by reducing the housekeeping staff at office buildings (I'm seeing this happen right now, where I work), or canceling planned renovations or re-decorations. This would mean less business for contractors or vendors. These contractors, and Gates himself, may forgo home improvements, or travel, or purchasing new cars, etc. It would add to the unemployment problem. Or more simply put, we all seem to agree that middle-class "tax cuts" stimulate the economy. Why shouldn't upper-crust "tax cuts" do the same?
There seems to be an underlying assumption in your questions, that Bill Gates' money will be better-spent in the hands of the tax-man. Or perhaps the assumption is that Gates must prove he will spend his money in some way that promotes so-called social justice, before he can keep his own money. Perhaps both. But there seems to be widespread agreement that government is both mismanaging our money, and managing too much of it to begin with. So why would it occur to anyone to raise taxes on Bill Gates, et al? Yet a third assumption I think I detect is that money "stuck into personal savings somewhere" is somehow lost to the economy. I don't know a lot about banking, but I thought it was pretty basic knowledge that the money in a savings account (or other investment) is being lent to business owners, or to the guy buying a car so he can get back and forth to work every day. Is that any worse than the money being stuck into some bureaucracy somewhere? Isn't it actually better?
Another mistake, which I made in my own previous post, was to neglect the very real possibility that higher tax rates on the wealthy will reduce tax revenues. So it is possible that higher tax rates will actually reduce the amount of money being wasted by govt. But only by slowing down the overall economy.
