As Obama and GOP Debate Bush Tax Cuts, Taxes Have Little Effect on Economy

0
534

President Obama threw down the tax gauntlet to Republican opponents Monday by calling on Congress to approve a one-year extension of the Bush-era tax cuts for Americans earning less than $250,000 a year.

“We don’t need more top-down economics. We tried that theory … we can’t afford to go back to it,” Obama said. “That’s why I believe it’s time for the tax cuts for the wealthiest Americans, including myself, to expire.”

Of course, Obama knows that plan isn’t likely to pass because the GOP-led House will decry the plan as a tax hike on the wealthy and Romney will cast it as hurting the people who are in a position to create jobs.

In fact, Romney told a conservative radio talk show host that the president’s proposal would “kill jobs.”

“What the president is proposing is therefore a massive tax increase on job creators and on small business,” Romney said in a taped interview for the John Fredericks Morning Show – Commonsense for the Commonwealth” on WHKT-1650 in Hampton Roads, Va. “Small businesses are overwhelmingly being taxed not at a corporate rate but at the individual tax rate. So successful small businesses will see their taxes go up dramatically, and that will kill jobs.”

The Obama plan has a provision in it that will also spare small business owners, thus leaving the Republicans defending the status quo – keeping tax cuts for the rich, while the middle- and working-class are left out.

So in terms of political gamesmanship, Obama may have scored a point.

But what neither candidate will say is that all this bantering about tax cuts really won’t make the difference in terms of jobs creation.

First of all, employment is the only area of the economy that is struggling to rebound. Overall, the economy is showing slow but steady gains. Some companies are actually seeing profits increase, but they are not yet hiring.

“They won’t hire more people until they have a business need to do so,” Christopher M. Gorman, president of Key Corporate Bank in Cleveland, Ohio, told NPR’s “Weekend Edition.”

“A lot of companies adjusted very quickly with the significant downtown and what companies found is they got by with fewer people if they used technology in a way that they could become more and more efficient.”

In other words, technology has eliminated some jobs that may never come back.

Furthermore, it is expensive to recruit, hire and train employees, even before cutting the first check. Replacing trained, experienced workers is expensive, too. It’s not something employers are anxious to do.

“CEOs are taking a conservative approach; they want to hire smartly,” Lynn Ann Casey, CEO of Arc Aspicio, a management consulting firm that specializes in domestic and global security, said in the same interview.

“Despite the economy, it’s not easy at the moment to hire good people,” Casey said.

That’s a pretty staggering statement when one stops to think about how desperate people are for work.  And, apparently, desperation is an unattractive quality. It makes people grab for anything to get a check, but it doesn’t guarantee a lasting relationship.

“I think people are discouraged about find jobs and they’re not putting the same level of effort they were into finding jobs and understanding not just what they can get out of a job, but what they can contribute to a company,” Casey said.

“We’ve had numerous people who we brought on board who weren’t exactly sure what they wanted to do and in six months or a year they find that it isn’t a good fit for them and they leave,” Casey said. “We can’t hire people we can’t retain so we need to know that they are going to be committed to the long-term before we hire them.”

So all Obama’s proposal did was smoke out the GOP on where it stands regarding the majority of Americans – in case it was missed somewhere along the way.

As painful as it sounds, targeted applications ultimately will be more successful at ensuring steady employment, slow growth in the job market will continue for a while and some jobs may never come back – so figuring out where one’s industry is headed and being prepared for it is essential – and voters should not delude themselves into thinking that tax cuts or tax hikes will really make a big difference either way.

Jackie Jones, a veteran journalist and journalism educator, is director of Jones Coaching LLC, a career transformation firm.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views, policies or position of Atlanta Black Star or its employees
[wpdevart_facebook_comment ]