Did you notice during the election just ended that the Number One topic of conversation was jobs? It seemed that each and every politician vying for election – or reelection – was touting his or her ability to create jobs. "Just elect me," they all said, "and I'll create jobs." Did you believe them? Neither did I.
What's the deal with these political types? It's pretty obvious they don't know what they don't know. They seem to think there's some mysterious button you push, or bill you pass, or speech you give that creates jobs. Well, here's The Bottom Line: The only jobs government creates are government jobs.
Let's start with a simple fact: Only a tiny percentage of those who will read this have ever created a job, or ever will. That task is left to the entrepreneurs who risk their time, effort, energy and (often plenty of) money for one, and only one reason: They want to make a profit. Remove the profit incentive and opportunity and you remove the willingness to take a risk. And that risk-taking is what creates jobs if and when they're successful. Or, often financial ruin if they fail. And the Number One disincentive to job creation in our Country at the moment is the uncertainty over future tax rates.
The Bush-era tax cuts for the 54% of us who actually pay income taxes (notice I didn't say for the "rich") expires on New Years' Eve. Unless legislation passes between now and then, we'll experience the largest tax hike in American history. Income taxes will go up for everybody, and for some as much as 50%. Taxes on long term capital gains will go up from 15% to ordinary income levels. Inheritance taxes will go from zero to 55%. Does this make sense, especially in a recession? Of course it doesn't. So why are the Democrats so unwilling to extend those tax cuts for everybody, including the so-called "rich?" The answer is Class Warfare. And it's getting very, very old.
According to the Dems, couples making $250,000 or more per year are "rich." Let's see now. An Orange County firefighter and his R.N. wife would easily eclipse that number. Pay the current 35% tax on that income, plus California's up to 10% income tax, plus SSAN, SDI, FUI, Louie, Dewey and Huey taxes, plus property and sales and inventory taxes, and then throw in the mortgage payment and college tuition for Junior and Sis, and you're anything but rich. And if you're a small business owner who's incorporated under Sub Chapter S, you're paying taxes on your gross earnings before you can make corporate investments or take corporate deductions. These are the people who create jobs. These are the people the Democrats want to punish for being successful. These are the people who stand to lose if the Bush-era tax rates sunset. And then We the People will lose because they'll have less discretionary income left to create jobs. Does this make sense to you? To anybody? Oh yes, I forgot. It makes sense to Obama, the current majority in Congress and the DNC.
So here is my prescription for job creation. Ready? Make the Bush-era tax rates permanent for everybody. Permanent. Remove this uncertainty and get the government out of the way and jobs will miraculously appear, just as they did under Harding, Kennedy, Reagan and Bush. And then lower our corporate tax rates from 35%, the second-highest in the world, to no more than 15%. Why the corporate tax decrease? Something like $2,000,000,000,000 (that's trillion with a "T") in corporate profits which have been earned overseas are languishing over there to avoid the imposition of onerous U.S. taxes on them if repatriated. Allow it to come home without a nasty tax penalty and we'd be awash in capital. It's that simple.
What's that I hear? "What do you, The Chuckmeister, know about job creation, and why are you qualified to opine on this subject?" Well, dear reader, I happen to be a graduate economist and actually know whereof I speak. Plus, I've also created hundreds of jobs over my illustrious business career, unlike, by the way, Obama, Reid, Pelosi, Durban, Schumer, Clinton, Frank, Dodd, Dean, and dozens and dozens of other hopey-changey Robin Hoods currently prowling the Halls of Congress looking for some booty to confiscate.
Only 7% of those who serve in the Obama administration have prior private-sector business experience. That's down from 56% in the Bush era. We have Ivy League academicians and theorists trying to manage a capitalistic economy they abhor without the slightest idea of what they're doing. Maybe that's why my simple remedy to the enormous problems we face as a society is so difficult for them to understand.
The Lame Duck Congress reconvenes today. Let's see if the Ruling Party learned anything from the spanking the electorate administered on November 2nd and decides to finally do what's best for our Country by making the current tax rates permanent. I'm not holding my breath…