The New Jobs Bill

The New Jobs Bill

          More proof they don't have a clue

By: Larry Poli

 

This job bill was prepared by a group of people, who have never run a business, had to make a payroll or provide a service for which customers had a choice.

The bill offers a payroll tax exemption of the 6.2% of wages paid to FICA.  This can total up to a wage cap of $ 106,800.00.  This exemption is for 1 year from date of higher and if you keep the employee for more than 52 weeks the business gets a $ 1,000.00 income tax credit on year 2011 tax return.  The exemption only applies to new employees that were unemployed for at least 60 days prior to being hired.

What are some of the flaws with this bill, (like shooting fish in a barrel) (You know I'm conservative, that last statement would piss off the gun control advocates and PETA at the same time)

 

1)      This tax credit is only going to help those that were planning to hire any way. No company is going to make a decision to hire based on a tax credit of any amount.  If the business is run well and doesn't need the added employee why will they hire?

 

2)      The 60 day rule has many problems on its own

a.       A good company with good hiring practices will be looking to hire the best away from the competition if they need new people (The best would not be unemployed very long)

 

b.      What if there are two candidates and the one with greater qualifications has only been unemployed for 30 days and the other for 61 days.  Is a smart business going to hire the less qualified because of a tax credit?  Is the business going to make an offer to the shorter term unemployed and they stay on unemployment for 30 more days.  Now the government is paying for 30 days more unemployment, giving a tax incentive of up to approx. $6,600.00 and the person unemployed for 60 days is still unemployed.

 

c.       This whole 60 day requirement "smacks" of union input.  Remember the first on the bench the first hired back.  It sounds as if the law makers are saying  " those unemployed the longest "deserve" to be hired back first , it's only "fair"

 

 

 

 

3)      Another point to the 60 day rule and unemployment benefits

a.       If there are 2 people and 1 has been unemployed for 6 months and the other for 1 month wouldn't hire the 1 month unemployed save the country on unemployment benefits.  Why do I say that, the one unemployed longer has already burned through the benefit and they will be done soon, the newly unemployed has 5 additional months of unemployment benefit to collect.

                                                               i.      I wonder if this added cost of unemployment benefits has been figured in the bill

b.      This would be a liberals answer to job creation: If you are "giving out" jobs it is only fair to "give" the job to the person unemployed the longest because the one newly unemployed has more benefit to collect.

 

 

This bill is a way for the government to attempt to influence the hiring practices of business.  Successful companies (Those not getting bail outs) don't need help to make hiring decisions.  Companies will hire more people when they are needed to service their customers. Simple.

 

Or the government could be attempting to influence the job search practices of the newly unemployed.  Wait 60 days then start your job search.  Now think about that, if those newly unemployed report they are not looking for 60 days are they then not counted in the unemployment number?

 

As I stated, this will only help those companies that are already planning to hire and they would hire even if the jobs bill was not available.  Will companies take advantage of the Jobs Bill tax credit? Of course they will.  But there is not a direct correlation between the tax incentive and hiring more people.

 

This will benefit companies that hire union workers (especially in construction) because of the first fired first hired back model of the unions.   I knew this had to be a pay back to someone. 

 

Let me give you an example,  the government give a company a tax deduction for gas purchased for use in company vehicles, this does not mean I buy more gas than I need.   The government is giving other incentives to buy equipment, if I do not need a new van I don't buy it just because of a tax incentive. 

 

The government cannot "create" or cause the private sector to hire more people except through spending.  (Even that spending is inefficient, but that is another issue).  The government can "Create" an atmosphere in which the private sector may hire.  The government can do this by doing "NOTHING".  If the government got out of the way, take away the uncertainty that business face as to laws or requirements that may come from the government.  Reduce payroll tax across the board and that will cause more private sector spending, thus driving the need to hire more people to be of service.