Saturday, February 6, 2016

Bernie is simply fooling around with socialist rhetoric-Part-1

Sugarcoated socialist rhetoric against rich class to blame them for the misery of poor is nothing new in the history. Unfortunately history is also clear, such socialist blame game never worked. Let's review what Bernie had to offer against what we know about when such policies were implemented elsewhere. I will analyze it in a series of articles, focusing on each of the sixteen points he made :

 Bernie Campaign proclaimed ( point no-1 in his proposal ) : 

" Demanding that the wealthy and large corporations pay their fair share in taxes. As president, Sen. Sanders will stop corporations from shifting their profits and jobs overseas to avoid paying U.S. income taxes. He will create a progressive estate tax on the top 0.3 percent of Americans who inherit more than $3.5 million. He will also enact a tax on Wall Street speculators who caused millions of Americans to lose their jobs, homes, and life savings. "

  >>>Corporate Tax is already very high in USA. You increase it further, more jobs will be lost. Most of the business in USA are surviving under a hanging sword. Not every business makes money like Google or Apple. 99% business are barely floating. Pointing at a few banks and large corporations which make huge money and then showcase it to show American business is running on huge profit, is simple travesty of facts. Like the way top 1% makes most of the American wealth, similarly  only top 1% companies in USA, makes top profit. Rest are struggling everyday to survive.

  But Corporate tax is fairly flat in structure unlike income tax. So corporate tax increase will hit even mid-sized business which is not in great shape in America.

 So what would happen if Corporate tax is increased?

 A. Increase of corporate tax is completely vague term used by Bernie without any specific details. If he means to say, employment tax to be increased or property tax or tax on profit, then I must say from my experience of running business, in either case most of the business will be hurt and to remain floating, they will do more lay off.

 B. If Tax on profit is increased, then management will pocket more bonus to reduce profit margin. Which in turn will reduce cash reserve for American corporation. Net affect will be reduced expenditure on R&D and marketing/sales. So more R&D and sales jobs will be lost.

 If people start believing in such trash thrown by Bernie campaign, they will simply be paid back by losing their jobs if corporate tax is further raised. 

 However the point is- this suggestion by Bernie is absolute vague and based on voodoo economics. He is simply rallying on unfathomable business illiteracy of extreme left liberals. He never run a business in his whole life. I run 3 business in America. I can clearly say his suggestions are dangerous for Americans.

Increasing the federal minimum wage from $7.25 to $15 an hour by 2020. In the year 2015, no one who works 40 hours a week should be living in poverty.

   >> This is a good goal to have and I support this. But do you know what would happen if average wage is increased? More low wage jobs will be lost in automation. Again, it is good for my business which deals with automation electronics as I have seen, my clients weighs our automation solution against minimum wage workers being replaced. This will fasten automation of low wage jobs-in effect, most of the low wage earners will lose their jobs faster than before.

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