Obama Doesn’t Get It: Tax Incentives Won’t Make Businesses Hire Employees
Remember that over the last couple of years these same politicians have inflated the cost of hiring employees by jacking up the minimum wage and expanding unemployment benefits (among other things). Now they’re wondering how how to encourage more hiring. And their brilliant idea?
A tax credit for businesses that hire.
WASHINGTON – President Barack Obama on Tuesday proposed a tax incentive for small businesses that add workers, even as Congress struggles to figure out how such an idea would work.
Lawmakers have been working for several months to develop a tax credit for businesses that hire workers, but they have been unable to figure out how to do it in a way that won’t be abused.
Neither Obama nor his top advisers offered details Tuesday. They didn’t say how big the tax break would be nor how it would be administered. Obama pledged to work on the issue with Congress.
“I believe it’s worthwhile to create a tax incentive to encourage small businesses to add and keep employees and I’m going to work with Congress to pass one,” Obama said.
This is sort of like cash for clunkers, but instead of getting credit for buying a new car you’re getting credit for hiring a new employee. And much like cash for clunkers, this isn’t actually going to generate a lot of activity that wouldn’t have happened anyway. Because people don’t buy new cars based on a tax credit, and business owners don’t hire new employees based on a tax credit. Those decisions are largely made on need.
This tax credit will give businesses that were going to hire anyway a tax credit. Not necessarily a bad thing in these uncertain economic times, but it’s not likely to accomplish what Obama and his cronies want to accomplish.
What’s frustrating is that the solution is glaringly obvious. And clearly Obama and his cronies know what the problem is. It’s too expensive for business owners to hire new people right now. That’s why Obama and his fellow liberals want to offer the tax credit. But what they should be doing, because as I’ve already pointed out this tax credit is likely to be ineffectual, is address some of the reasons why hiring has become so expensive in the first place.
Roll back the minimum wage. Stop expanding unemployment entitlements. Cut payroll taxes. That will make businesses more likely to hire again.
