The president’s jobs bill is a bad idea that not only won’t work, it probably would make the economy worse.
That’s the conclusion of the Tax Foundation, a nonpartisan tax research group based in Washington.
Read the report by clicking here.
The Tax Foundation relied on “a review of the academic literature on these sorts of tax policies.” The analysis is interesting.
Obama’s tax incentives for companies that hire new people could backfire. Those incentives do not take into account the long-term costs of hiring someone, which pale in comparison to the one-time credit. In addition, there are no rules to keep employers from gaming the system. They could lay off one employee, hire a replacement and get the credit. The government would out up to $9,600 without gaining one job.
The temporary cut in payroll taxes will lead to very little new consumer spending. That’s based on “empirical research and well-known economic theory.”
Allowing businesses to expense 100 percent of certain investments would be good, but only if it is a permanent policy.
Various permanent tax hikes against the rich would harm the economy. Read the report to get the details, but the overriding idea is that “…these measures are not motivated by sound tax policy, but rather as a means of punishing politically unpopular groups such as the “rich,” hedge fund managers, and oil companies.” The most successful among us would invest less and hire less.
The bottom line is that “Lawmakers should stop trying to jump-start the economy in the short run and begin crafting policies that set the country on a long-term growth path.”