Myths and millionaires
As every good businessman knows — including Governor Romney with whom I had been associated as a limited partner at Bain Capital Ventures —the soundness of a company and its ability to create jobs does not rest on lower taxes for the company or its senior management.
If Governor Romney and congressional Republicans, including Senator Scott Brown, continue to insist on renewing the special Bush tax cuts for the wealthiest 2 percent of Americans, it will do nothing to create jobs. It is a fiction, pure and simple, that taxing so-called "job creators" will have an adverse effect on the economy.
Just the reverse is true. Instead of making millionaires even richer, those tax dollars can be used more constructively to retain teachers and policemen and firemen and repair roads and bridges. These are all essential services that will rebuild our economy and maintain a civil society. In addition their tax dollars will contribute to deficit reduction.
The son of a Lithuanian immigrant to this land of now diminishing equal opportunity, I had the good fortune to start a small company that enjoyed a measure of success that was eventually acquired by The Stride Rite Corporation. Twelve months later I was asked to become president of Stride Rite.
Throughout the last 10 years of my tenure, the company's return on investment was in the top 1 percent of all companies listed on the New York Stock Exchange. We created thousands of new jobs. By the time I left, we had over 5,000 employees. Our success rested on the quality of the product and service provided to consumers. This was a reflection on the workforce as well as the management. My success could not have been possible without the people, whom we continued to hire and to train as we grew. I depended on them as much as they upon me.
My taxes were sometimes as high as 70 percent on the top level of my income — far higher than millionaires would now pay if the special Bush tax cuts are allowed to expire. But that tax rate never discouraged me or anyone else from growing a company.
The myth of millionaires as job creators being turned off by higher taxes is the creation of some members of the House and Senate who are funded by these same millionaires. Many millionaires never create any jobs at all. Those who do will create them regardless of the tax rate. It is a matter of record that during the time tax rates, both corporate and personal, were so much higher, our economy was booming. Conversely, the slowest job growth since World War II took place between the Bush tax cuts for millionaires and the 2008 economic meltdown.
Two months ago, every Republican in the House and Senate, along with 19 House Democrats, voted against a bill extending tax cuts for 98 percent of Americans and 97 percent of small businesses. Why? Because the bill didn't include a renewal of the special Bush tax cuts that go only to the richest 2 percent of us. If so, I hope they will take a fresh look at the facts.
Allowing the wealthiest 2 percent to withhold tax dollars robs children of health and education. It is not only immoral it is bad economics. They are the future of our country which has begun to fall behind our competitors. It is also destroying the American Dream which brought my father to this country alone at age 15. Both he and the Founding Fathers would agree that the future of this nation should not be compromised by the shortsightedness of those so well off in the present. These are not the values that made this country great.
Arnold Hiatt is the former CEO of The Stride Rite Corporation.