Tax credits for creating jobs a sure way to boost economy

It’s high time — way past time, in fact — for Washington to try a surefire economic stimulus solution to create jobs in this debt-crippled economy. It’s a plan that can win plaudits from all manner of pols and ideologues, from the extreme left to the ultra right.

Give tax credits to all companies that hire new workers.

It is the ultimate Republican tax-cutting plan: It rewards the private sector for acting in its own best interest. And it gives wary companies that are now just hoarding their profits the confidence that can get them to start expanding again.

It is the ultimate Democratic jobs-generating plan: It guarantees results before federal tax dollars are spent.

It is the ultimate tea party no-new-taxes/no-new-programs populist plan: It produces the new jobs without government adding more taxation or more reams of red tape.

And it is, by definition, the most shovel-ready plan any economist can conjure: By using job-generating tax credits to prime our economic pumps, not a dollar of taxpayer money would be spent before the private sector has created and filled the jobs.

A side benefit of this is that it is not one of those programs that reward the special interests that have invested in our politicians — presidents, senators and representatives — by giving them campaign money as a down payment for future access and consideration. All employers have a chance at getting this tax credit — all they need to do is hire new employees.

Now it turns out the template for this approach was just created. On Aug. 5, President Barack Obama announced a program to give companies tax credits for hiring unemployed military veterans. Employers hiring unemployed veterans would get a $2,400 maximum credit for every short-term hire and $4,800 for every long-term hire. The plan would give companies a $9,600 maximum credit for every long-term hire of a veteran with service-connected disabilities.

Well, if this works for creating jobs for unemployed military veterans, why not expand it to include all unemployed Americans? That Republican-sounding idea was raised by the former chair of Obama’s Council of Economic
Advisers, Christina Romer.

“There are 15 million other unemployed people,” Romer said. “Let’s do a big tax cut for any firm that’s willing to hire. Someone, I think, ought to be making the case for swinging for the fences, not small programs.”

Martin Schram writes political analysis for Scripps Howard News Service.

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