Wealth inequality in America

 

When the rich get tax cuts, they look to see where they can invest this excess money.  They tend to do so in their own businesses.  But the most they can do in the short term is not hire more people, but reduce operating costs through additional automation.  It makes more sense in the short term to replace labor with (labor-saving) capital, i.e., automation.  THAT is why tax cuts for the rich do not “trickle down”, and why unemployment rises.

Any business enterprise relies on some combination of Labor and Capital.  Reducing Labor requires increasing Capital Investment (automation).

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About johnvkaravitis

Senior Financial Analyst: Energy, Insurance, IT consulting, Pharmaceuticals, Publishing, Real Estate
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