On Wednesday, President Obama unveiled a plan calling for the elimination of corporate tax loopholes and tax cuts. Clearly this is a savvy political move before the election, especially considering many of his possible opponents are advocating similar reductions.
Although we've now experienced two consecutive months of employment gains -- a reduction in new unemployment claims -- this should not mean we should take our eye off of the problem of unemployment. Despite a decrease in new claims, we need to ask for statistics about those who are no longer being counted; those who have exhausted their 99 weeks of UI benefits and are no longer a part of official numbers should still be of grave concern for the well being of our nation. We may be officially hovering around 8.5 percent, but the number is likely much higher. Millions of Americans are still trying to figure out how to feed themselves; every day they don't work is another day further from landing employment and the longer one is unemployed, the less likely an employer will be to hire that individual.
What are we going to do to turn around this crisis? In my previous post, I advocated for hiring managers to take a chance on the unemployed; I even challenged the president to renew the tax cuts he once gave to employers for hiring an individual unemployed longer than eight months.
The Dow is flirting with 13,000, higher than before the Great Recession and clearly much higher than during the Clinton years of prosperity. Admittedly, I'm not an economist, but as an average guy on Main Street, I have to wonder how the Dow is doing so well but millions of people like me are not.
It's time to play hardball (and not with Chris Matthews); a good old game of "I'll scratch your back, if you scratch mine." Instead of simply cutting corporate tax rates for good presidential PR during an election year, we should be calling for a more comprehensive plan. If we, the tax payers, are going to scratch the back of corporations by taking on more of the burden they will NOT be paying, they need to scratch ours.
An illustration: Company ABC will receive a tax credit for every long-term unemployed American hired. Once the company hires more than X number (predetermined number which can be a fixed number, say 10 or scaled to the size of the business) of the long-term unemployed, they will automatically receive a reduction in their effective rate, dropping it to 25 percent (the rate being floated as acceptable).
Of course, we would require some sort of mechanism to avoid game players who want to hire and fire, just to reap the benefit of a tax cut.
Let's face it, in many ways, this is much ado about nothing. There are myriad of reports about the number of corporations who are skirting all tax liabilities anyway. That said, tax cuts are not just a gift that is given because you clamor loud enough and threaten votes. There are roads to upkeep (that facilitate the transport of business goods), bridges to maintain, disabled veterans to support and many other necessities to which we, as a country, must contribute to in order to maintain prosperity. We'll all in this together!
This plan is comprehensive and one from which everyone benefits: The president gets points with voters for implementing a jobs creation program; the president also garners points with the business community for finding ways to cut taxes; Congress gets points for working together to help both Wall Street and Main Street; Americans win by getting back to work; business wins by obtaining tax cuts and consumers who will begin spending again.
Cross posted from Reframe Shame™