Obama shelves Jobs-credit Proposal

[VADem11]

Bowing to widespread Democratic skepticism, President-elect Barack Obama will drop his bid to include a business tax break he once touted in the economic stimulus bill now taking shape on Capitol Hill, aides said last night.

Obama suggested the $3,000-per-job credit last week as one of five individual and business tax incentives aimed at winning Republican support. He proposed $300 billion in tax relief in a bill that could reach $775 billion, and he resurrected the jobs-credit proposal from the campaign trail as one of his main provisions.

I'm glad that Obama listened to the criticism made by Krugman and Congressional Democrats and actually responded. I'd like to see fewer tax cuts for business but this is a start. It's going to be great to have a President who has the ability to compromise.

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/12/AR2009011203298.html?hpid=topnews

[firedupdem]

1. That credit sounded like a great idea to me...but I guess they know

better.

[mucifer]

2. I think the potential for loopholes is there. Hire people then lay them off

and get the money etc. then go overseas. I don't trust the big business.

[firedupdem]

5. yeah, and I guess they will look for any loophole to beat the system...

makes sense.

[geek tragedy]

3. The question was whether people would actually hire unneeded

employees just to get the tax credit.

[FrenchieCat]

6. Naw......it was only $3,000, and one had to keep the employee for two years.

It paid for the Payroll taxes of a $50,000 per year employee at the most.

It was a good way to increase the chances of an employer making one permanent hire instead of going through a temp agency, or hiring two part-timers, or hiring instead of offering overtime.

Those that didn't hire wouldn't get the credit. Guess it may have been too much of the money set aside for what wouldn't be needed till the middle of the recovery.

[eridani]

8. Nope--the really great idea is to supply businesses with customers

--who can afford to buy their products. Tax credits are utterly useless for that.

[SoCalDem]

14. Employers will not hire people they don't need..and until there are buyers for the products

they will just keep laying off.. Once the spiral starts, it's almost impossible to stop:(

[sandnsea]

11. Keep jobs in the US

Everybody said it was a great idea when it was connected to keeping jobs in this country. But Krugman says different, and the brilliant independent thinkers bobble right behind him.

[yurbud]

4. it's time for business (big business anyway) to get more stick and less carrot

preferably a stick carved into a baseball bat and applied to their heads.

[stillcool]

12. Damned if you do, damned if you don't..

those corporations provide jobs, but they're global...and they can take those jobs anywhere they want.

Demands Made by Transnational Corporations to do Business in a
Country under the Global Economy

1. Greatly reduce Corporate taxes and taxes on the rich.

2. Greatly reduce government spending in order to cut taxes.

3. Increase taxes on the middle-class and poor to pay for the necessary government services, such as support for TNCs.

4. Reduce environmental, work-safety, and product-safety regulations.

5. Provide millions and millions of dollars in tax incentives and subsidies to TNCs in order to convince them to locate in your country.

6. Build and support modern industrial factories for TNCs to use rent-free.

7. Create tax-free export processing zones so that TNCs can produce products without paying any taxes at all.

8. Reduce and lower worker's wages by keeping the minimum wage low or eliminating the minimum wage altogether.

9. Reduce the costs of hiring workers by reducing or eliminating workers' compensation taxes, social security taxes,and health insurance taxes.

10. Allow child-labor at almost any age and under any conditions.

11. Do not enforce maximum work-day hours, such as the eight hour day or the 40 hour week.

12. Use government power to crush and weaken labor unions. Allow companies to hire security firms to harass and intimidate workers and unions.

13. Allow TNCs to freely take their money and profits out of your country.

14. Reduce government support for health-care, education, and anti-poverty and anti-hunger programs, forcing workers to work for any wage just to take care of and feed their families.

15. Support global free trade and work to prevent countries from denying companies the right to sell their products despite the brutal conditions, environmental destruction, and exploitation of their workers.

16. Don't restrict or limit immigration and encourage high levels of unemployment in order to force workers to compete by working for lower and lower wages.

17. Limit and restrict local and national government control over their economies. Encourage global bodies to set economic standards that will benefit TNCs.

18. Limit the ability of workers and citizens to challenge the TNCs and their own government's economic programs which help the TNCs at their expense.

19. Create massive national debts in order to bankrupt governments and force them to be even more at the mercy of the TNCs. Governments can thus say they have no choice but to accept these conditions.

20. Force your citizens to accept lower standards of living and quality of life in order to guarantee higher profits for TNCs.

[yurbud]

17. wouldn't it be nice if Obama took one corporation, broke it, and made it his bitch...

just to put the fear of God in the rest?

[The_Casual_Observer]

7. What's next, the education credit thing? & after that, hope itself?

[eridani]

9. How does that help people with no disposable income? n/t

[backscatter712]

10. Good - maybe the money will go towards more effective stimulus.

Overall, it's better use of the money to do things like pay for building and repairing infrastructure, pay for job creation, and so on, rather than just giving tax breaks to big business.

But I think this was part of Obama's strategy to begin with - Obama deliberately made the stimulus bill too conservative, to squelch the Republicans, and the Democrats protesting and demanding the bill have more stimulus and less tax cuts was part of the plan - he's measuring Democratic support, and probably got some feelers out with the Republicans and figured out how much resistance they're likely to muster.

Like Nate Silver mentioned, this is the Price is Right strategy.

[DRoseDARs]

13. At $9/hr, 6 hrs/wk, that $3K would have just covered someone like me working a bottom-rung job.

According to the W-2 I just got last week from that job, I made just shy of $3000 in 2008 doing janitorial work there. So with that $3K-per-job credit, the owner could have hired several more people to do the bottom-rung janitorial work at greatly-reduced cost to her. And the workers would still have to pay full taxes on those paltry wages and maybe/maybe not get a refund after April 15th. Awesome.

Thank you Krugman and others for politely telling Obama to take that credit proposal and shove it. I doubt it had much chance of creating the types of jobs PEBO was hoping it would create.

[eridani]

16. Why would they bother doing that if their customer base is shrinking?

We can't afford to waste money, and tax credits are very poor at bang for the buck in the stimulus department.

[DRoseDARs]

18. Er, try reading my post again. Maybe you'll see it the second time around...

:)

[eridani]

21. With no business justification, no positions will be added, credits or no

Statistically, situations like you describe are not very likely.

[DRoseDARs]

22. *Sigh* You're still missing my point. Sorry I didn't add the :sarcasm: smiley for you.

My point in that post was she'd have no real good reason to bother hiring anyone with such little help from this scheme and even if she did, those jobs would be of little use to the ones who get them.

[Hawkowl]

15. Awesome!

He is moving leftwards! This was just a useless giveaway. Now there is more money freed up for a bigger impact.

[nodramamama]

19. Looks like Obama followed Krugman's advice

Immediately after Obama asked Krugman to come up with a good idea, Krugman wrote a column urging him to drop this job credit. and boom. he dropped it.

[PVnRT]

20. Good. It was an ineffective proposal not likely to do any good.