Support tax credit to create jobs?
The Obama administration has been criticized for intervening too much in the economy.
But now the idea of a tax credit for companies that create new jobs, something the federal government has not tried since the 1970s, is gaining support among economists and Washington officials, the New York Times reports.
One version of the approach, to be unveiled next week by the Economic Policy Institute, a labor-oriented research organization, would give employers a two-year tax credit if they increase the size of their work force, or add significant hours of work, the Times says.
Employers would receive a credit worth twice the first-year payroll tax for each new hire, or several thousand dollars depending on the new worker’s salary.
What do you think? Up or down? Other ideas?
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25 comments Add your comment
Just Saying
October 7th, 2009
11:26 am
It’s the best idea that I’ve heard yet! Incentives work for my kids, It should work for the kids on Wall street.
Native Atlantan
October 7th, 2009
11:48 am
Why not just pass the fair tax, you would have to work really hard not to get a great job!
Get Real
October 7th, 2009
11:52 am
Why do politicians always try to use short term manipulation on our markets. Let’s take some weight off the backs of employers to make it more inviting to start businesses in America. Let’s get rid of a good deal of government regulation and reign in law suits. Let’s try to be competitive and stop thinking of what we can do to make business work in the present quarter, make it work for the future. Cut business taxes across the board and it will apply to all businesses and not just the those who excell in manipulating short term government manipultaion. The president is a college basketball fan so I suggest that he veiw the United States as his team and that we are losing. What can he do to get us to the finals again. Right now the competition doesn’t go to class and the don’t graduate. They don’t abide by our rules so he needs to change our rules.
RGB
October 7th, 2009
11:54 am
The Obama administration should lower marginal tax rates for small businesses, corporations, and individuals. Lowering the break-even point for businesses and letting consumers keep more of what they earn (which will help businesses) is the way to go. They could eliminate capital gains taxes as well. The result: lower unemployment and more revenue to the Treasury. The downside is that the Democrats would lose some control over citizens, which is their ultimate aspiration.
A two-year quick fix is not unlike the so-called stimulus checks the federal government sent folks. It gave the politicians cover (”hey, we’re doing something”) but didn’t help in the long run.
Businesses and individuals need to be able to count on a stable economic environment over a number of years so they can make capital investment and other budgeting decisions. U.S. taxes for business rank second only to Japan and Obama wants even higher taxes to give wealthy (pronounced “job creating”) individuals their comeuppance–as he sees it. Obama should stop spending the unspent porkulus funds and return that money (and more) to businesses and individuals. The unemployment rate across the U.S. is 10%, but in D.C. it’s negligible. Why should government employment grow when the real unemployment rate (as reported here last week) is 17.8%?
What’s a business to do after the two-year period–fire the person since the tax credit expired?
Plus, the administration and Democrats in Congress want to add a $1,700 burden to every family (from the Cap & Tax bill) and tax select individuals $3,800 for health care–along with repealing the Bush Tax cuts and raising marginal rates as well.
In contrast to all these new Obama taxes, a two-year credit for job creation is chicken feed.
I guess the chickens are coming home to roost.
Larry Orange
October 7th, 2009
12:27 pm
Demand, not tax credits , creates jobs. You can give businesses all the tax credits in the world, but if the demand for your product isnt there,then there is no sense to hire somebody. Outside of education and health care, the demand for all products is down.
The Right Jobs
October 7th, 2009
12:43 pm
Good idea, though my opinion is that it should be focused towards manufacturing, green/clean tech, high tech, etc. jobs. This shouldn’t apply to retail and low value services jobs. There are already too many mcjobs in the US; we need to incentivize the creation of high value jobs that move us back up the global food chain to a producer and not just a consumer. Actually, I would apply this to less carbon intensive farming as well, since food is going to become even more of a valuable resource.
Atlanta in particular has too many of these retail mcjobs, which is why there are so many empty storefronts. Imagine if people spent their energies creating high value products vs. tsotchkes and “luxury” (read: discretionary purchase) goods.
Just my $.02
HoJo
October 7th, 2009
12:50 pm
Ugggh, more government manipulation. At first glance, it looks like a good idea, but then you are PAYING business to create jobs but only for 2 years. You don’t need to pay them, just get out of the way and lower taxes, PERMANENTLY. Obama’s inexperience with business is really killing us right now. He just doesn’t understand simple economics and that is, poor people don’t create jobs, rich people do. All we are doing is trying to suffocate the entreprenuerial spirit in this country. Nobody with any sense is going to sink their hard earned money into Obama’s economy with rapid inflation and a sinking dollar quickly approaching. Barack needs to wake up and quit trying to create his Socialist utopia before our economy is irreperably damaged. I can only assume he wants to wreck the economy so more people have to rely on the govenrment to keep from starving, creating a new sub-class of citizens that are beholden to the Democaratic party for their very existence. What a wonderful idea.
RBG is correct, we need less government not more and the sooner we all realize that the better off we’ll be.
clyde
October 7th, 2009
1:04 pm
Another tax credit,more people to work,more goods manufactured.Who buys?Not me.I’m not buying anything I can’t eat or don’t genuinely need.Case in point:my dryer burned out a year ago and I’ve managed to do just fine without one.I’ll probably never buy another one.I’ve learned to live without one,just as I’ve learned that there were a lot of things I could do without owning,or doing.
Let this economy go down until it bottoms out and pick up what’s left and go from on from there.Do nothing is always an option that needs to be explored when deciding on a course of action.
Support tax <b>credit</b> to create jobs? | The Biz Beat (via postie) | Kantaas.Com
October 7th, 2009
3:42 pm
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Road Scholar
October 7th, 2009
4:03 pm
How did it work before? Did it really create long term jobs? I’m skeptical since it hasn’t been used in 40+ years.
urccjss
October 8th, 2009
8:36 am
Say it agin, Larry Orange. I don’t think they heard you.
Soothsayer
October 8th, 2009
8:55 am
Here’s an idea: Let’s ship all of our jobs to China, India, Malaysia, Singapore, Vietnam and anywhere else people will work for pennies an hour. Then, sit around and wonder why people in this country are out of work. I understand the new REALLY thin flat screens are out now. Hurry down and get yourself one. That is, if you can afford one on your unemployment.
I hear so much about the corporate tax rate in this country. But, with all of the deductions and credits available to businesses, the tax they actually pay is some of the lowest in the developed world (Brookings Institute). No, corporations can avoid paying ANY tax simply by opening a factory offshore. This is because they don’t have to report that income until they bring it into the U.S. HELLO Switzerland.
You see, it wasn’t supposed to work out this way. The plan was that all those people who lost their jobs were supposed to find OTHER jobs that paid just as much as their factory jobs. Unfortunately, something went horribly wrong.
Thogwummpy
October 8th, 2009
8:57 am
Actually, tax cuts into the investment sector have a proven track record for improving economic conditions. BUT, this administration is so loyal to collectivist class resentment idealogy, it won’t consider it (remember, Bush’s tax cuts to pull us out of the Clinton recesssion produced 50+ months of growth…but poor people didn’t get an equal rebate to rich folks—something which speaks to the hypocrisy of Democrats who demand a steeply PROGRESSIVE tax system upon tax payers; but then want FLAT rebates to so their slacker constituency that pays nothing, would get another nice payoff check from industrious peoples’ money). We no longer have a government with sense—-just one devoted to the concept of hammering people who plays by life’s rules, whilst elevating those who want to glide thru this world effortlessly. From those that earn, to those that don’t. From those that deserve, to those that don’t. It’s no longer about what is ethical or right for America….it’s only ‘what can we do to accrue power by looting and redistributing to the mouth-breather Jerry Springer audience Democrat voter.
Thogwummpy
October 8th, 2009
9:01 am
Oh, and evidently Soothsayer isn’t bright enough to realize that taxes are a business cost…which get passed down into the price of everything we pay. Typical Leftist, can’t understand that raising taxes on corporations—IS ONLY RAISING TAXES ON CONSUMERS (us!). But hey, thank a teacher for giving us a culture of pea-wits that have zero economic competence.
Thogwummpy
October 8th, 2009
9:05 am
Oh, and Soothsayer is typical of the problem in America. Evidently, doesn’t quite understand that taxes are a COST to a business…and anytime you hit businesses with a tax, it gets passed along to it’s customers (us!). Again, it’s this philosophy the immature have of resentment. We can thank our educational system for churning out economic pea wits!
Soothsayer
October 8th, 2009
9:18 am
Thogwummpy:
Let me get this straight: if we were to lower the corporation tax to 0%, all the corporations would close their foreign factories and move those jobs back to the U.S.? Is that what you’re saying?
Rather than name calling you should research “transfer pricing” and also how corporations are taxed on foreign source income.
The Bush tax cuts did not pull us out of a recession. Only the lowering by the Fed kept the U.S. from returning to a recession. By so doing, coupled with ease of borrowing, created the housing bubble that has virtually bankrupted this country.
You see, your whole mentality revolves around this mythical populace who wants to live off your earnings. That is simply not true except in your mind. You believe that your taxes are taken from you and taken directly to some layabout. Again, this is simply not true. I believe 99.99% of Americans are good, hard-working people who, through no fault of their own, are facing unbelieveably hard times.
HDB
October 8th, 2009
9:30 am
Soothsayer is definitely on point! American businesses, by taking manufacturing offshore, has been a large part of why this nation is in the economic fix that it’s in. The USA once led the world in manufacturing; now, we lead in consuming! I, like the preponderance of Americans, want to work, support my family, and partake in the American Dream. To motivate American business to employ Americans should be a part of the national ethos; instead, the maximization of profit at the minimization of labor is now the corporate mantra. When CEOs of American corporations make almost 500 times the median salary of their employees, something is quite skewed here!!
Del
October 8th, 2009
10:07 am
It appears that the combination of the global economy and out of control growth of federal government has not been good for America. We have a bloated government populated with politicians with no experience in business and thus zero business acumen. It’s not rocket science, When you open markets to foreign competition from countries that have labor costs far below ours you lose competitive parity. Bad things happen your trade deficit grows, domestic producers can’t compete without sacrificing quality control and R&D. Outsourcing and off shoring production occurs with American jobs being lost. Hopefully, we haven’t gone down so far that we can’t get back up but it will take Americans getting rid of career politicians, instituting term limits so that have a continuing flow people in government with real world experience.
Cynthia
October 8th, 2009
10:16 am
I think it’s a good idea and an incentive for companies to start creating more jobs. It is tough out there for those out of work and competing for every opening along with thousands of others. I say let’s move ahead on this plan.
HDB
October 8th, 2009
10:19 am
Thogwummpy: if you really looked at the Bush tak cuts, they did NOT spur employment; what they did was spur PROFIT! More people LOST jobs under the Bush Administration than they did under Clinton! There was NOT 50+ months of growth; there was about 36+ months of job losses in the first term…..and over 7M jobs lost over Bush’s 8 years! If you look at history, every time a Republican gets into the White House, the nation’s unemployment rate RISES….and the time period it takes for one to find employment rises from the average of 90 days under a Democrat to over 240 days for a Republican!! If the CEO of Ben and Jerry’s Ice Cream makes only TEN TIMES the median salary of its employees…and the preponderance of American CEOs make 500 TIMES that salary…AND REWARDED FOR LAYING OFF AMERICAN WORKERS….the motivation is incorrectly placed!!
Del
October 8th, 2009
10:41 am
HDB evidently you haven’t been around very long or you failed to do your homework before commenting. You overlooked the Jimmy Carter administration’s failure, Clinton was coasting through two terms and Bush had to turnaround the 2000 recession. Now you have Obama who has no previous experience trying to campaign through his first year in office to cover up his incompetence.
Sagegirl
October 8th, 2009
11:18 am
Hmmm, let’s see. My job is ending tomorrow because my employer, in it’s infinite wisdom has moved my work to Malaysia to save on costs and grow the global economy. Good going IBM!!
ViewFromMidtown
October 8th, 2009
7:55 pm
I’m sure all the Republicans here will support his since Gov. Perdue and the GOP-controlled legislature promoted and passed job-creation tax credits here in Georgia not long ago. Those credits are a big part of the reason NCR is moving to Gwinnett.
bammer
October 12th, 2009
8:40 am
Every time I see Obama on TV talking about ObamaCare, cap and trade, gays in the military, the Chicago Olympics, Nobel Peace Prize, Skip Gates, or leading some dumb, useless session a the UN means he is not working on creating real, private sector, small business JOBS. It reminds me he probably couldn’t meet a payroll at a Chicago parking lot without government assistance.
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