Tag: tax credits

No Tax Credits for You, Senator DeMint Tells Veterans

Michael MatheronLeave a comment

November 11, 2011

Yesterday, the terribly ineffective U.S. Senate agreed on something, and astonishingly, it was a jobs bill, heretofore a non-starter.  However, in a nearly unanimous vote on the “Vow to Hire Heroes” bill they agreed that it just might be good policy – and just plain decent – to offer a tax credit to businesses that hire veterans. Furthermore, the bill contains far more than the tax credit provisions ($5,600/veteran; $9,600/disabled veteran). Here’s how the tightfisted House GOP Chairman of the Veterans’ Affairs Committee wrote of what this bill would provide: 

• Expanding Education & Training: To begin moving veterans out of the unemployment lines, the VOW to Hire Heroes Act of 2011 provides nearly 100,000 unemployed veterans of past eras and wars with up to 1-year of additional Montgomery GI Bill benefits to qualify for jobs in high-demand sectors, from trucking to technology. It also provides disabled veterans who have exhausted their unemployment benefits up to 1-year of additional VA Vocational Rehabilitation and Employment benefits.
• Improving the Transition Assistance Program (TAP): Too many service members don’t participate in TAP and enter civilian life without a basic understanding of how to compete in a tight job market. Therefore, the VOW to Hire Heroes Act will make TAP mandatory for most service members transitioning to civilian status, upgrade career counseling options, and job hunting skills, as well as ensuring the program is tailored to individuals and the 21st Century job market.
• Facilitating Seamless Transition: Getting a civil service job can often take months which often forces a veteran to seek unemployment benefits. To shorten the time to start a federal job after discharge, this bill would allow service members to begin the federal employment process by acquiring veterans preference status prior to separation. This would facilitate a more seamless transition to civil service jobs at VA, or the many other federal agencies that would benefit from hiring our veterans.
• Translating Military Skills and Training: This bill will also require the Department of Labor to take a hard look at how to translate military skills and training to civilian sector jobs, and will work to make it easier to get the licenses and certification our veterans need.
• Veterans Tax Credits: The VOW to Hire Heroes Act provides tax credits for hiring veterans and disabled veterans who are out of work. “

It’s that final Veterans Tax Credits that set DeMint’s pants on fire.
 
Senateloon Jim DeMint, One Is a Lonely Number. Even I, a longtime non-supporter of DeMint, was surprised by his vote against this bill, the single vote that stole unanimity from the Senate (of the 95 voting Senators).  Here’s what he had to say about the Vow to Hire Heroes bill: “We’re pandering to different political groups with programs that have proven to be ineffective. All Americans deserve the same opportunity to get hired. I cannot support this tax credit because I do not believe the government should privilege one American over another when it comes to work.”

Let’s hope the Senate doesn’t bring up a vote on a bill called “Tax Shelters for Corporate Golden Toilet Seats,” or “More Handouts for Citizens Who Lost More Than Two Hundred Million Dollars in Fiscal Year 2010.” Mr. DeMint would surely again oppose federal intervention like that as well, would he not?

Boehner Accidentally Tells the Truth About Tax Cuts

Michael MatheronLeave a comment

September 16, 2011

Mr. Boehner: “And here in Washington, there’s a fundamental misunderstanding of the economy and it’s led to an awful lot of bad decisions. And the reality is that employers will hire if they’ve got the right incentives, but the incentives have to outweigh the costs. As an example, businesses aren’t going to hire someone because the government’s going to give them a $4,000 tax credit, if the government mandates that are imposed on them cost a lot more than that temporary credit. In our recent years, these mandates have been overwhelming.”

“Government’s threat to job creation has two other components. One is the current tax code which discourages investments and rewards special interest. It strikes me as odd that at a time when it’s clear the tax code needs to be fundamentally reformed, the first instant to come out of Washington is to come up with a new host of tax credits that make the tax code more complex.”

In fact, what he criticizes is actually the ultimate Republican tax-cutting plan: It rewards the private sector for acting in its own best interest. And it gives wary companies that are now just hoarding their profits in cash the confidence that can get them to start expanding again.

And, it’s also the ultimate Democratic jobs-generating plan: It guarantees results before federal tax dollars are spent.

Moreover, it’s the ultimate tea party no-new-taxes/no-new-programs populist plan: It produces the new jobs without government adding more taxation or more reams of red tape.

And it is, by definition, the most shovel-ready plan any economist can conjure: By using job-generating tax credits to prime our economic pumps, not a dollar of taxpayer money would be spent before the private sector has created and filled the jobs.

A side benefit of this is that it is not one of those programs that reward the special interests that have invested in our politicians — presidents, senators and representatives — by giving them campaign money as a down payment for future access and consideration. All employers have a chance at getting this tax credit — all they need to do is hire new employees.

Now it turns out the template for this approach was just created. On Aug. 5, President Barack Obama announced a program to give companies tax credits for hiring unemployed military veterans. Employers hiring unemployed veterans would get a $2,400 maximum credit for every short-term hire and $4,800 for every long-term hire. The plan would give companies a $9,600 maximum credit for every long-term hire of a veteran with service-connected disabilities.

Well, if this works for creating jobs for unemployed military veterans, why not expand it to include all unemployed Americans? That Republican-sounding idea was raised by the former chair of Obama’s Council of Economic Advisers, Christina Romer: “There are 15 million other unemployed people,” Romer said. “Let’s do a big tax cut for any firm that’s willing to hire. Someone, I think, ought to be making the case for swinging for the fences, not small programs.”

GOP mantra, though, “no taxation without representation; no taxation with representation.”

Really, They Will Say ANYTHING! – House Majority Leader Eric Cantor on $45 Billion for School & Home Rehabilitation

Michael MatheronLeave a comment

September 14, 2011

From the newsstand copy of POLITICO that I found in a Starb*cks this a.m., a report about Eric CAN’Tor’s thinking on a portion of the American Jobs Act, i.e. spending $45 billion dollars on rehabilitating schools and homes: “I don’t believe that our members are going to be interested in pursuing that,” House Majority Leader Eric Cantor (R-VA) told reporters Monday. “I certainly am not. There are perhaps laudable goals behind the proposals, [but] the fact is we don’t have the money. And we’ve got to prioritize. And right now, it’s about getting people back to work.”

I wondered, is Mr. CAN’Tor acquainted with how buildings are “rehabilitated”? Without exception, these projects require construction workers and the use of durable goods, two areas where the unemployment rate runs from 9.1% (durables) to 13.5% (construction). That’s a bit more than 2 million people, many out of work for more than two years, and many more doing part-time work only, among the huge numbers of underemployed. In addition, rehab projects require electricians, plumbers, architects, security personnel, inspectors, permitting, and other allied professions. These jobs then cause other services to gear up. Think insurance, food services, etc. The dollar put into the economy “grows” – $45 billion for these projects might then result in $145 billion in carry on spending from the private sector that, now, is sitting on huge piles of cash, literally, cash in money market funds.

The real answer, though, is of course the obvious one: CAN’Tor and his minions are out to remove Keynes from the economics texts, to dismantle governments – don’t kid yourself – of all sizes. Supporting useful fiscal stimulus (they actually do know it’s useful) is, to them, off limits. And all this despite the mischief it spawns in the country. In poker terms, they are all in. They believe, despite all the evidence, that the private sector will leap to the rescue, and rehab those schools and homes! If only they could pay well below the minimum wage; if only they were utterly unregulated; if only they didn’t have to do this; if only they didn’t have to do that; if only; if only. . .