Why do republicans support tax cuts for the rich and big corporations?

As an unorthodox Marxist, I'd like to offer a "yes-but" answer to your question.

1. On the one hand, the conservative advocates of "trickle down" economics are partly correct.

As Marx recognized (and as most conservatives insist), the search for * profit * is the engine that drives capitalist economies. And there's no good way around this, no matter how we feel about capitalist social problems.

If rich individuals or corporations can make * profits* on their investments, they usually will invest more. If their * profits* fall -- everything else being equal -- they will generally invest less.

Therefore, the idea of "supply side" economics, of reducing taxes on the corporations and the wealthy in hopes they invest more, really does work at times. Case in point: the economic boom of the 1960s, which was partly fed by the John F. Kennedy's tax cut for corporations.

2. Profit levels in a capitalist economy, however, don't depend only on tax rates.

They also depend partly on the "rate of exploitation" of labor that's possible. When corporations can pay working people fairly low wages, in comparison to the amount of dollar value the working people add to the product, the profit rate generally rises.

So if the government can help the corporations keep wages low -- or if the government can help the corporations invest in labor-saving machinery, so they get more value out of their employees per person -- this can help push profits up. And that can encourage new investment and new economic growth.

3. However, if a well functioning capitalist economy, "production" itself means nothing without "consumption." The corporations can earn profits only when the goods and services they produce are actually sold.

But here the corporations run into a paradox. The "middle class" or "working class," broadly definied, is the biggest source of consumer demand in American capitalism. If Middle Class/ working class Americans reduce their consumption, the profit rates of the corporations eventually will fall - because they can't sell enough of what they make.

4. Therefore, "trickle down" economic policies that raise the income the wealth of the richest Americans, while driving down the income levels of the middle class / working class, can be self-defeating.

If the "rich are destroying the middle class," as you write, the rich are probably going to destroy much of the basis for their own investments in more production. They will hurt their own potential customers, and make them less able to buy things. Which means hard times for everybody.

5. Therefore when tax cuts for the rich [and lower wages and/ or service cuts for everyone else] produce a serious reduction in middle class buying power, "trickle down" economics has perverse effects. It can kill the general middle class prosperity that has served as a "golden goose" delivering higher profits.

Many liberal and not-so-liberal economists believe that's what's happening in the American economy today.

6. There's another Marxist argument against "trickle down" economics that is rarely cited by liberals, because it's too controversial. But it's worth noting here, even if everyone in YA hates it.

Briefly, one problem with high profits for rich people and big corporations is -- what do the rich in DO with all that money, once they've got?

The usual answer is: they invest it. But if a capitalist economy is in recession, that often means that most industries have too much productive capacity already; they have too much sunk investment in machinery, labor, raw materials etc. The LAST thing they want or need is added investment that makes existing "market gluts" worse.

So when corporate profits and individual wealth become too large, the perverse result is that the economy becomes cursed with too much investment capital and too few places to park it.

In those conditions, the super-wealthy and the big corporations often turn to pure financial speculation -- to investing spare cash in credit default swaps and so on. And in the end, financial speculation of this kind always generates financial "bubbles" that ultimately burst -- as they did just a few years ago, nearly collapsing the world economy in the process.

In short, if we reduce taxes too much for the rich, they not only will "destroy" the middle class. Eventually, they will "destroy" themselves. Why? Because they won't have enough legitimate places to invest their money, and will turn to suicidal forms of gambling with it instead -- just as they did under Geo. Bush.

I suppose I will try and take a stab at this question. Though I consider myself to be conservative, I will try and answer this in a respectful and thoughtful way.

1) In answering this question, one would tend to ask another question. This question would be, "Has the working class had a reduction in the quality of life in the past 40 years? Many would be inclined to say that is has not. When it comes to these political matters, you could find evidence and statistics to support either argument. Much of the time, it simply depends on what you would like to believe. Arguments supporting that that the standard of living has not declined would include the relatively free flow of credit (even given the recession starting in 2008) and the wide availability of cheap consumer goods.

2) The answer to this question would be similar to the first. Most economists, who have a broad understanding of market forces, would disagree with you. If corporations and the rich alike were relieved of some of the tax burden, then would have more power to both hire more wages an increases alike. Evidence to support this argument could be found in taking a look at one of the more socialist nations in Europe, Sweden. In examining swedish corporations, you would notice that not a single fortune 500 company has been founded since the implementation of heavy socialist policies. Furthermore, If Sweden was a US state, then its standard of living would be in the bottom 10.

3) One of the reasons that republicans support policies favorable to large corporations would be that, if we make it too hard to conduct business in this country, then they would go elsewhere. Why would you, as a corporation, want to operate in an environment that heavily punishes wealth and free enterprise? I don't condemn labor unions and minimum wage laws, but I also don't think that a "soak the rich" policy is a great idea. It would be better to have corporations "hoarding up profits", than to live in a society had virtually no employment or business opportunity. I think the depressed conditions of The Soviet Union and Eastern Europe should be good examples for the support of this theory.

The rich are the ones who invest.

And, besides. How much of their money should be take? Is there ANY limit in your mind? Do you want to take 90% of the rich man's money. At some point we need to stop increasing the taxes on the rich for no reason other than it is their money!

Liberals might make the numbers look like quality of life has reduced for the working class but I remember what it was like when i was a kid almost 40 years ago. The "poor" were the middle class in my day. The "poor" has far more toys than I ever dreamed of! And I remember when the poor were skinny because they struggled to get enough food on the table. But I have worked as a cashier and can tell you the "poor" is now most likely to be obese! Most of the skinny poor I have seen these days are drug addicts!

In short: The poor is NOT getting poorer. They are just getting richer at a slower rate than the rich are. So the gap is widening!

Now, having said that, I don't agree with the mindset that we need to give tax breaks just willy-nilly. I think we need to increase the tax breaks for actions we want to encourage. Obama wanted to DECREASE the tax break for the ubber rich making donations to charity. That is totally backwards!

And we need to encourage people to create jobs here instead of outsourcing.

I can't help but feel the pain you are feeling - after reading these answers it only proves that the working man and woman are firmly set beneath the yoke of the corporate elites. What's worse is that they support these people's actions blindly; believing that the accumulation of wealth is due to hard work on the upper class's part is a fantasy. All the while the rich are getting richer and the poor, poorer - and I highly doubt that the entire working class is made up of lazy, couch-ridden socialists, no matter how much the Right insists it is.

Because everyone should be taxed with an equal percentage... why treat the man sitting on the street doing nothing for his country better than the hardworking, successful man. If given a tax cut, that successful man is more likely to extend his company and give an opportunity to the man sitting down doing nothing. This country is run by the people who work hard, not by the people who don't give an effort rely on the government taking away a successful man's money to live.

Republican social engineering is the act of manipulating people into performing actions techniques; essentially a fancier, more technical way of lying.

The people that have the gold makes the golden rule!

Your questions certainly hit the nail on the head, but the answers you got shows how futile it is to try to enlighten the dim.

Empirical evidence show that across the board tax cuts reduces unemployment while increasing wages and benefits.

There's actually a fairly strong correlation between rising taxes for corporations and the unemployment rate. Just thought I'd throw that out

CONSERVATIVES IGNORE FACTS AND REALITY.

• 83 percent of all U.S. stocks are in the hands of 1 percent of the people.

• 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.

• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.

• 36 percent of Americans say that they don't contribute anything to retirement savings.

• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.

• 24 percent of American workers say that they have postponed their planned retirement age in the past year.

• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.

• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.

• For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.

• In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.

• As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.

• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.

• The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.

• In America today, the average time needed to find a job has risen to a record 35.2 weeks.

• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.

• or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.

• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.

• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.

• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.