Taxes forcing businesses, residents to move?
New evidence tax hikes are costing jobs
- Duration 9:01
- Date Jul 7, 2012
New evidence tax hikes are costing jobs
Also in this playlist...
This transcript is automatically generated
-- high taxes don't drive away jobs -- -- wanna look at what's happening to thousands of Wall Street jobs.
Reportedly fleeing New York City taxes and thousands of four residents of Marilyn.
Well -- doing the same thing moving next door to live in Virginia where taxes are lower.
So is this -- the DC needs to cut taxes to create jobs and all of the United States.
Hi everybody I'm David -- welcome to Forbes on FOX let's -- is focused.
We have mr.
Steve Forbes himself Victoria Barret -- younger John -- and mark.
-- will save the jobs number that came out yesterday was pathetic.
Could tax cuts get us moving in the right direction again.
David every time we have substantial reduction and tax rates it works and a time we've had high tax rates like the 1930s 1970s we stagnated.
John Kennedy understood -- Ronald Reagan understood it.
I don't know why we have to learn lesson again in the bottom line is when you raise the price -- good things like productive work -- taking success.
Get less of them lower the price you get more of them.
Mark tragedy if it works -- states maybe we should over the whole United States.
Well David we've been lowering taxes for about the last twenty years.
And there is no real relationship between tax rates and job creation.
I eat I eat this urge any of my colleagues here to show me is study.
That conclusively shows that lower tax rates spur job growth.
But -- -- directly related to labor costs and that's what's happening in the New York City.
And I don't think the federal government has any influence on the influence on this at all it's a state level concern a city level.
-- -- well you know mr.
Steve Forbes love statistics and he's got a lot of studies for your board are -- -- with -- numbers right now let's go to Victoria Victoria what do you think we'll lowering tax rates.
In this environment I think it absolutely what it sends the signal that Washington is getting serious about cutting its own budget.
And expecting less out of our pockets that would absolutely and encourage job growth and mark you know come to California we've got.
Booming industry is here.
But we also have a very high tax rate.
And a very high unemployment rate.
It doesn't make sense California unemployment rate should not be higher than the national average.
But it is because is a very expensive state to do business and so kind companies including a lot of the tech companies I talk to every day.
Are are moving jobs to other states -- that the tax rates lower.
All right what bucking the trend at least for New York is our own Rick Unger who is actually going to be moving to go to New York pretty -- we look horrible way and we'll look forward to -- -- -- you know what you got come and you got state and city income taxes way yup you got property tags up mass transit to exit polls Europe.
Sales taxes sin taxes.
Be prepared my friend.
-- may be a better stay here in California what do you think but I don't know what we want OJ hereby taxes are gonna go ahead.
Listen I you know who who among -- doesn't wish this was true none of us light.
Paying taxes but the simple truth is if you look as as mark pointed out.
They're just doesn't appear to be a correlation if there was.
Why do we have -- employment during the Clinton years when the taxes were higher.
Less employment following the bush tax cuts I wish it were true it doesn't seem to be.
I'll add one thing to mark said he pointed out that labor costs play a major role as they do and employment.
But there's something that plays a larger role and that is consumer demand if people don't want to buy it.
You can have nothing but money in the bank if you're company you're not gonna spend that on jobs if people aren't buying your product unfortunately.
That's where we have to.
All right John Tammy is there -- connection between tax rates and jobs.
Yeah I mean this one so basic there are no companies and there are no jobs without investment and so if you want to increase investment logically you would take less.
From individuals out there working -- I would just add to this that if if you really want to boost job creation through the tax code.
You've got to reduce that the price of of work and investment on those most able to create jobs.
This is gonna kill Rick but you reduce it on the top 1% the vital human society.
Create the companies and invest in the companies that create the jobs Steve mark tajiks and there is no -- study connecting.
Job growth would lower tax rates what do you say well let's look at the real world.
The 1960s when the Kennedy tax cuts kicked -- -- a vibrant decade much more vibrant from the 1960s.
Japan from 1915 and 1975.
Cut taxes every year -- good at 10% rate last twenty years they've been raising taxes going I'm.
Spending spending binges high unemployment stagnation France same thing Southern Europe same thing so don't you don't need -- study just look.
Look at the real world and -- -- -- the -- 01 thing they -- rolled up his second mark because we have.
We may not have had many tax increases in the past couple years because the recession although President Obama is one of the cutting but we have a whole list of new taxes coming in and obamacare and that's weighing on the decision to play -- -- wallets away won't see what had finished a question please mark.
That's weighing on a lot of businesses decisions about whether or not to hire new workers.
And and let's take the real world let's look at big -- example San Francisco it's booming vacancy rates are down and people are hiring like crazy and attacked boom in and high -- environment.
People are not saying I'm not gonna move my business to San Francisco.
Or I'm not going to do business here because -- tax rates taxes.
Do not influence what's happening in -- Oreo white -- -- fifty total.
I think it okay going to get into a very it's it's a two tier economy -- on the tech side that's absolutely true there's a lot of venture -- slashing -- startups.
But when you talk to small business owners here.
Or or folks who are trying to expand their small businesses they are not hiring because of the incredibly high -- and the San Francisco -- local tax or not.
And in the cost of hiring every new employee is simply too high for them so they're not hiring and Johns candy there is a net exodus out of California a lot of the companies that are leaving California -- because the high tax rates.
Yeah I think so -- I think we're not considered considering is the unseen here we can talk about the companies and jobs being created in California and it's beautiful but what's unknown -- unseen.
It's how many other Facebook's.
And and Intel's.
And YouTube's would be created absent this kind of that this tax environment that takes too much from the productive.
Rick -- don't you think that a lot of businesses -- I talked to a lot of businesses particularly small and medium sized -- the backbone of the economy.
Are holding off on hiring because they're worried about all those tax increases coming -- obamacare and what happens in January 2013.
Plaque actually it's interesting and it kind of goes to John's point that he made earlier where he said that you know it's obvious if you put money in their pockets they'll invest.
It's not obvious and it's not always true there are trillions of dollars sitting on the books of these companies and they're not investing -- -- your question David.
There is some truth there and we've recently seen a study that backs it up there is something to show that people may be hanging back to see what happens in the election.
But when you look at what the reason is it doesn't appear to be about taxes.
Could there be some some influence in terms of obamacare.
Interestingly not on the small companies that you referenced not the fifty below placed but it looks like it's having some influence on the larger company -- The but let's talk about the smaller companies I think we all agree that is the backbone of America Steve.
A lot of those smaller companies have to have people at minimum wage these are people that don't normally have insurance.
With the obamacare taxes on line.
These smaller companies could get killed by this.
Yes I've talked to a number -- restaurant tourism they'll tell you this thing goes and have a -- to a 3000 dollars for the cost of an employee they're gonna cut back or go out of business.
And so in the real world when you.
I had burdens to people they end up doing less and again we want to -- in the thirties -- -- restaurant we did in 1970s.
We're doing it again today.
And little Condoleezza my other tax rates down there growing.
-- about what router otherwise they're gonna break I'm very I think US which what I'll I'll be Evian name Zain tackle holds more Applebee's in New York.
Then any particular -- -- -- he'll tell you he has three projects.
Waiting on line it before -- January 2013.
If in fact taxes go up he's not gonna be starting -- new projects.
-- couple couple quick things a couple quick things -- that there are some specific issues as it pertains to restaurant tours.
When they are large chains like what what you just site apple -- mind that most most restaurant -- Are not large chains and most restaurant -- do not give health care benefits to their employees.
Bobo -- -- after a scanner in the new tax assessor somewhere right on the line.
OK guys we're gonna miss this -- we got to leave it we've got to Omaha we have literally run out of time coming up next.