Isn’t a tax on the wealthy a tax on jobs?

"Wealthy people create jobs for other people and we put that at risk by taxing them more"


This argument is closely related to the above argument that wealthy people will just leave the country if we tax them appropriately. As argued above, the evidence from high tax countries does not support this.
It is also worth pointing out that public expenditure is an important source of jobs for the economy through the:

  • direct employment of public service workers;
  • indirect employment of workers, by contractors supplying outsourced goods and services;
  • employment of workers on infrastructure projects

It has been estimated that globally public spending supports 40% of all jobs: 15% as public employees, but 25% in the private sector (David Hall, Why We Need Public Expenditure, Public Services International Research Unit, London, 2010 p. 20 In addition other public measures such as subsidies and employment guarantee schemes also support employment in the economy.