Friday, September 9, 2011
The Fundamental Problems with the President's Approach to Jobs
President Obama's jobs plan, which he revealed last night in a speech before a joint session of Congress, relies in large parts on lowering the payroll tax. So, for Republicans and others who claim to hate taxes, what's not to like? I can't speak for Republicans, but it might be that they realize that this particular tax cut, which is minor and temporary, is likely to have little impact on employment while adding billions to the deficit. There are many alternatives that would achieve more while not adding to the country's fiscal burden. A prominent example is tax reform that lowers tax rates, reduces deductions, and is revenue-neutral, much like the President's own Bowles-Simpson Commission suggested last year. I don't know why the President has not gone down this road instead of fiddling with ineffectual tax breaks to go along with spending targeted at increasing jobs for favored union constituencies. Here is the Wall Street Journal's take, which seems on target to me.