Hiring Tax Credit: Support Builds For Proposal Rewarding Employers For Hiring, More Hours

http://www.nytimes.com/2009/10/07/business/07tax.html:

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 grappling with the highest unemployment in a generation.

The proposal has some bipartisan appeal among politicians eager both to help their unemployed constituents and to encourage small-business development.

Read the whole story: http://www.nytimes.com/2009/10/07/business/07tax.html

Comments

[GreenN10]

Goldman and Bank of Amerika run the markets along with Geithner, and beagle boy Ben. There is no free markets, only welfare capitalism and socialism for capitalism.

good articles: http://iamned5.blogspot.com

[Mildmannered]

"A September report by a foreclosure task force appointed by Florida's Supreme Court pointed to a shift in the root cause of foreclosures: "People are no longer defaulting simply because of a change in the payment structure of their loan. They are defaulting because of lost jobs or reduced hours or pay."

A second federal stimulus package is needed or else the housing market (and job market) (and tax revenue) will continue to spiral downward.

[yappnmutt]

i'm gonna hire someone because i got a tax break. i'm gonna hire someone when my top line is stagnant or falling. i'm just trying to keep the employees i have and don't intend to hire until i see top line growing enough to hire. i'm just trying to stay in business now. help me do that.

a payroll tax break for small business and employees is what is needed. it was needed last year and its needed today.

[lkim65]

Oh well, ain't this just ducky. Let's give even more money to corporations that just totally raped main street!

[MyLIberalKos]

Everything but the little people have become too big to fail.

Everyday we pay the consequences of Reaganomics and neoconservative economics

good articles; http://iamned1.blogspot.com

80's: Arthur Laffer, MIlton Freidman, Greenspan, Alexander M. Haig, Jr, Donald T. Regan, James A. Baker 3rd,
Later: Robert Rubin, Bernanke, Paulson

[sparky73]

we do not need to give more tax breaks to the rich business people owners. If anything, we need to raise their taxes to help fund increases in welfare and unemployment benefits! duh

[ringo3khan]

How about outright monthly payments to those who have full time jobs to compensate them if they elect to go part time so that the company can hire another body to do the same job the other half o the time;
I'm sick of working full time for a "part time" dollar.

[jbruski]

This is truly unreal. It really shows that the notion of a "business plan" is no longer relevant. As long as a corporation can bury their failures under the tombs below the pyramid scheme upon which its built their lobbyists will make it happen. Debt to income ratio's no longer matter,as long as your CPA can make the balance sheet look good go for it! This house of cards is going to just continue to crumble. So now we're going to give all the cheating corporations a tax break to hiring CSR folks in BF Nowhere? We're totally screwed

[MarcusT]

This is very high on the stupid list.

[rkrenke]

More corporate welfare to create even more minimum wage jobs - we need some creative thinkers and doers in DC, not the same old failed policies.

[surferbuoy]

What would your idea be? How would you creat more jobs today?

[rkrenke]

Penalize corporations that outsource jobs; invest in training and education programs for laid-off, unskilled workers; institute real healthcare reform so small businesses can invest more capital in growing their companies as opposed to investing in the health insurance industry (an industry that provides zero value); ban offshore tax shelters and force companies that receive American subsidies to hire American workers; invest in technological and infrastructure improvements; retool the auto industry so it produces more than cars, i.e., mass transit, etc.; minimize the use of the H1B Visa and start hiring American engineers; etc.

Tax breaks are nothing more than code for corporate welfare - why do we keep doing the same thing over and over and expect a different result? Einstein considered this the definition of insanity.

[CanadianBeef]

Tax breaks require no imagination. That's why conservatives like them. I'm OK with them, too, as long as those corporations that EVADE taxes by locating in tax havens offshore, should be pursued and prosecuted. Bringing those corporate offices back will not only heal the deficit, but will bring office jobs back to America.
If a company wants to locate in New Hampshire to avoid paying state taxes, I have no problem with that. The people of New Hampshire havve decided to live in a libertarian "paradise". But I have a big problem with companies that offshore. None of those corporations should receive a dime in federal contracts, like Halliburton does from its offices in the Middle East.

[tiredofthesameoldstuff]

The thing is the relocating in another state is often just a post office box or a single room in an office building that is never used while the real corporate headquarters with all the people working in it is still at the old location.

[FoonTheElder]

These credits are just more corporate welfare to pay corporations for something they were going to do anyway.

The credit won't encourage corporations to hire people they otherwise wouldn't. There are already two job credit programs that can provide employer credits for hiring the unemployed. If the corporation is not doing well and has no tax to offset the credits, then the credits are useless until they have profits.

This is just another band aid on a gaping wound. Until the government deals with corporate anti-trust and unfair trade, nothing will happen to increase employment in the U.S.

[jsarets]

I don't object to this tax credit as long as it's financed with tax penalties for layoffs.

Actually, it would be better if businesses that hire employees were issued permits to sell on an open market to businesses required to buy permits in order to layoff employees. This way, the value of employment would be priced by supply and demand rather than central planning.

Of course, it would have to be illegal to buy and sell the same permit. Otherwise the prices would be driven by speculation, which will be a major problem with carbon cap-and-trade.

I'm not opposed to deficit spending. The financial system now demands over $1 trillion per year more money than it issues. Short of the government issuing debt-free money, we're best off borrowing this immense sum of missing money at the lowest interest rate we can get, and nobody pays a lower interest rate than the U.S. Treasury.

So we should be a running a trillion-dollar deficit. That's one of the few things that Obama is doing well, although he probably thinks he's being irresponsible. If we don't let Treasury borrow this money, then Wall Street will be happy to lend it to us at a substantially higher interest rate. The deficit is unavoidable either way. It's a feature of our broken financial system.

But we should invest this deficit in ways that generate revenue beyond the initial transfer payment, such as extending credit to businesses that hire employees.

[jerrypl]

The private sector has created zero jobs!!! It has been the public sector that has been our only job growth sector. Government needs to support employers in this area. You all figure it out. Either the government funds go into unemployment compensation, or it gives employers tax credits to hire people. YOU choose which makes more sense?

http://eye-on-washington.blogspot.com

[lifeagain]

The healthcare industry has produced jobs. Obama is on schedule to destroy that soon. But that is the goal. Destroy healthcare and make people lose jobs. Pass cap and trade and destroy more jobs. Then make all the illegals...legal. Then we can have millions of people compete for the jobs that are scarce now. All hail the wise Obama admin

[jsarets]

The provider side of the healthcare industry is creating jobs, driven by increased demand from an aging population. The payer side of the healthcare industry hasn't been creating many jobs, it's been consolidating in pursuit of profit margins.

If the cap-and-trade mechanism were properly designed (which it's not), then it would promote job creation as well, as the industrial dinosaurs with low labor-intensity gradually give way to sustainable innovators with higher labor-intensity (at least initially).

We can create enough jobs for everybody, including those who wish to make America their new home, if we fundamentally change the way we invest in our economic development. This isn't a zero-sum proposition.

But I'm not much more optimistic about the Obama administration than you are. Not that I think McCain would have been any better. *shudder*

[FoonTheElder]

If you don't like that all the illegals are here, why don't you complain to your Republican corporations who sent recruiters to Mexico to bring them here for cheap labor, as well as your Republican Congresspersons who the corporations have paid off.

[lifeagain]

This is just another "cash for clunkers" program. When the credit is gone, the jobs go with it

[bereasonable0]

Maybe. Perhaps a good idea that needs to be tweaked ? How about raising the top tax rate then offering a tax credit for each of your US employees not just new ones.

[jsarets]

I agree. It's not sustainable if it's not revenue-neutral. That's why I suggest above two alternative approaches to implement transfer payments from those who fire to those who hire.

[lifeagain]

They just keep dancing around the solution. They are true believers that spending and big government is the solution. When that fails to produce, then they start tax credits/temporary tax cuts to stimulate. They can't come straight out and say that spending has failed to produce jobs because that would undermine their belief system. Unfortunately, Obama and his mindless ilk in Congress will continue down that path. The real goal is make people even more dependent and therefore ensure their power.

[bereasonable0]

I guess I am missing the difference between a tax credit and a tax cut. I think the former is more targeted thus enables government to achieve a specific goal where as a tax cut may translate into the goal of creating more jobs or it could translate into a larger bonus.

[jsarets]

The fundamental flaw in Keynesian political economy the attempt to correct misallocation of capital with reallocation of income. It's like trying to solve global warming with air conditioners.

There's a big difference between spending and investment.
There's a big difference between central investment and local investment.

The government can play a useful role in the economy by financing local investment. That's how we can create jobs and opportunities. Give communities a chance to invest in themselves.