Friday, November 20, 2009

Employer Tax Credits

What does an employer need in order to hire another employee, that is to “create a job”? How about more business for that employee to be doing. How about more people buying his products. A tax credit? Give me a break.

It’s clear these idiots in Congress have never owned a business. “Small businesses need this,” they say, and “small businesses need that” as if they had the slightest clue what any kind of businesses need. So they propose an employer tax credit to create new jobs. “Hire another employee,” they say, “and we’ll give you a break on that employee’s payroll taxes.”

Great. Are you going to pay his wages too, while he stands around reading comic books because I don’t have any work for him to do? The economy is crap, my business is down and shows no signs of being better, and you want me to hire new people not because I have anything for them to do but because the payroll tax on them will cost less.

That’s sort of the inverse of my grandmother’s, “These biscuits didn’t cost me anything to make because I already had all of the ingredients.”

The consumer’s equivalent is that “I’m going to buy a new car because it’s on sale. I don’t need a car and cannot afford one, and I’m taking out a loan that I can’t make the payments on and that will wreck my credit record, but the price on the car is too good to pass up.”   ("Cash for clunkers.")

The kind of businessman that will create new jobs based on the tax credit is, “I can make a new hire because it’s cheaper than usual. Do I need a new hire? No. Do I have anything for the new hire to do? No. Can I afford the new hire? Well, I can borrow to pay for the new hire; the price is too good to pass up.” They will be temporary jobs, because the businesses that fall for this are run by people who are so damned stupid that they will go out of business.

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