President Obama has proposed raising taxes on various individuals and using the money to "create jobs" under his American Jobs Act proposal. The reasoning behind the law led me to this question:
Suppose that the government takes 1 billion dollars from people who do most of the hiring in this country and in turn gives that money to extend unemployment benefits for a bit longer. Will that create jobs? Will it "save" jobs?
The simeple answer to the question is NO!!! IF taxes are raised on small business owners and the small businesses themselves as Obama proposes, fewer people will be hired. If that money is then spread around to all sorts of folks in small amounts as Obama also proposes, there will not be any big rise in the number of jobs. Think of it this way: if the average family gets $500 more in 2011 than it got in 2010 due to the new act, there will not be any major changes in the buying habits across the nation. $500 per family is just not enough to raise consumer demand by much.
In other words, the American Jobs Act is an income redistribution scheme, but it is most certainly not a jobs bill. It will not result in the creation of very many jobs at all. Infact, it will probably reduce the number of jobs created in 2012 if it gets passed.
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