I Agree with the Multi-Millionaire: It's Time to Raise Taxes on the Rich

In an article for Bloomberg posted today, “Raise Taxes on the Rich to Reward True Job Creators,” wealthy venture capitalist Nick Hanauer (a self-described "fat cat... in the top 0.1 percent") forcefully dispels the myth that higher taxes on the rich thwart job creation. As we have often argued here at NWLC, the truth is just the opposite: increased revenues from the wealthiest individuals and corporations are necessary to spur job growth and create an economy that works for all Americans.

The whole article is a must-read, but here is a preview:

...I'm a very rich person. As an entrepreneur and venture capitalist, I’ve started or helped get off the ground dozens of companies in industries including manufacturing, retail, medical services, the Internet and software.... Even so, I've never been a "job creator." I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.

That's why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.

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That's why our current policies are so upside down. When the American middle class defends a tax system in which the lion's share of benefits accrues to the richest, all in the name of job creation, all that happens is that the rich get richer.

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We've had it backward for the last 30 years. Rich businesspeople like me don’t create jobs. Middle-class consumers do, and when they thrive, U.S. businesses grow and profit. That's why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich.

So let's give a break to the true job creators. Let's tax the rich like we once did and use that money to spur growth by putting purchasing power back in the hands of the middle class. And let's remember that capitalists without customers are out of business.