Skip to content

ANDREW STILES: Obama Pushes Hiring Tax Credits Again – National Review Online

September 1, 2011

Obama Pushes Hiring Tax Credits Again

The only bipartisan thing about them is the opposition.

ANDREW STILES

SEPTEMBER 1, 2011 4:00 P.M.

The president has described the policies he plans to offer in his major jobs speech before Congress next week as “bipartisan ideas that ought to be the kind of proposals that everybody can get behind.” Which is an interesting way of putting it, because when it comes to at least one of those ideas — a hiring tax credit for employers — the only bipartisan thing about it is the opposition.

This proposal would give businesses a temporary, refundable tax credit — likely in the range of $3,000 to $5000 — for each new employee they took on. If that sounds familiar, it is because President Obama has already floated the idea — twice — and each time both Republicans and Democrats lined up to reject it.

Obama first pushed for the hiring credit in 2009 during negotiations over the stimulus package, back when Democrats enjoyed complete control of Congress. But the president couldn’t even get members of his own party on board with the idea. Even they could see the proposal for what it really is: pandering fluff that might sound good in a speech but makes little sense economically.

“I think it’s unlikely to be effective,” Sen. Kent Conrad (D., N.D.), chairman of the Senate Budget Committee, said at the time. “If you think about it, businesspeople are not going to hire people to produce products that are not selling. Who is going to hire in the auto industry if you give them a $3,000 credit to make cars that people are not buying?”

Sen. John Kerry (D., Mass.) concurred, saying the employer tax credit would likely have a negligible impact on job creation. As did Sen. Ben Nelson (D., Neb.). “There’s a question of whether that puts the cart before the horse,” he said. “If I don’t have enough customers for my product, hiring more people is not going to help, and tax credits are not going to be to my advantage.”

Even the business community, for whose benefit the tax credit was allegedly designed, largely rejected it. As William Dunkelberg, chief economist for the National Federation of Independent Business, explained then: “[Businesses] have no reason to hire anybody because they don’t have anything to do. That’s why the tax credit is a silly idea.”

In the face of such widespread opposition, the idea was ultimately axed from the final version of the $800 billion stimulus bill. But Obama clearly didn’t get the message, because in 2010, once it became clear that the first stimulus hadn’t quite panned out the way he’d hoped, and Democrats started clamoring for another round, he doubled down on the failed proposal, this time calling for an even bigger tax credit — $5,000 per worker.

via Obama Pushes Hiring Tax Credits Again – Andrew Stiles – National Review Online.

Advertisements

Comments are closed.

%d bloggers like this: