Latest plan for Welfare for Billionaires: job tax credits for employers.

[ddeclue]

Heard this on C-SPAN radio this morning:

This is a plan being considered by the administration and welcomed with open arms by the Congressional Republicans. (If a Republican loves an idea, run don't walk away).

This is more simply more supply side voodoo economics nonsense and adds to the debt, helps the rich and hurts the poor by drying up funding for social programs.

This plan would give tax breaks to employers who hire new employees.

It fails to recognize the following:

1) The employers already get to deduct your entire salary already because hey, it's not part of their net profits, it is a business expense just like the rent and the utility bills.

2) Business only hire when they are forced to do so by an actual operational requirement of their business. The tax credit offered is not enough to justify bringing on an employee for any period longer than the tax credit requires by law. When the tax credit goes away so will the job.

3) There's no way to prevent the credit from being used to churn the employment pool by hiring and firing people to collect these credits. For all we know based on what I heard on the radio there is no guarantee that it has to require that the hired employees be Americans or that the business location is within the United States.

4) DEMAND drives the economy, not supply. Capital chases DEMAND. Demand does NOT chase capital. Why? Because the investor class is chickenshit and won't invest in production until there is a overwhelming existing demand for a product or service.


If we want to solve our economic problems, we must increase DEMAND and then let THAT drive the economy.

How do you do that?

Raise the minimum wage to a decent rate - at the very least $12/hr.

Make unionizing much much easier.

Make a college education free to anyone who wants one.

Create a single payer or government operated healthcare system so that employees can feel free to change jobs and spend money.

RAISE not lower tax rate on businesses and the wealthy and use that money to stimulate the economy through public works projects to repair, replace and enhance national infrastructure.

The more you raise taxes the less businesses will feel bad about hiring new workers.

They will have a greater incentive to hire a new employee and convert the higher tax on their profit into a non taxed operating expense that they already get to deduct called an "employee."

Raising taxes will also serve to reduce the deficit (as we saw under Clinton) and improve the value of the dollar which has weakened dramatically in the last year which will make energy costs lower and help out the average citizen through lower gas and heating oil prices.

We need to get poor and middle class people in a much better financial situation before demand can resume - we need to make upward mobility possible again. Until this happens, demand will never recover.

[kestrel91316]

1. I would support this if it only applied to smaller businesses and not

giant multinational corporations. Places with fewer than 100 employees, maybe......or fewer than 500, or whatever. Just NOT the giant rapists.

[TxRider]

2. Not true

Capital is risked all the time.

For example one of the things that helped spur the internet boom was a tax law that said you could skip all capital gains tax as long as the proceeds of capitals gains sale was rolled over into a start up high tech company within 30 days. It allowed billions to flow into internet startups, and there certainly wasn't a viable product in the vast majority of those companies.

A similar law would promote a huge influx of capital and jobs into alternative energy companies and start ups if it were passed.

Raise capital gains taxes on capital gains over a million, and pass an exemption for gains rolled into alternative energy start ups and OPEC would likely be trembling at the knees in a 3-4 years...

We can put capitalism to work for us, if it's directed properly.

As for the effect of tax credits for jobs and companies, go look at what that has done for high tech in Canada, they have been doing this for years now, and at least in my industry, stealing companies and jobs and even capital from the U.S. for a decade.

[ddeclue]

3. Don't be silly capital is never risked until there is pent up demand,.

If capital were ACTUALLY risked, the government wouldn't have needed to invent ARPANET and spend money to get it to catch on in the military and the universities.

Those dot com Businesses you tout came along after the actual demand existed - they just got unwarranted tax breaks for nothing.