Phil Hauck's TEC Blog

Sunday, March 21, 2010

TEC members on Job Creation Ideas

As Congress and Madison recently looked at the economy and job creation at the urging of polls, they began to develop legislation that might propel job creation. I took this issue to my 30-or-so TEC members, who are the people who actually DO create the jobs, and asked them what "environment" they would like to help them begin growing again and creating jobs. Their thoughts follow. We sent it to our list of state and national politicians who represent us.

Job Creation Ideas
1. Put/keep as much money in people’s pockets as possible so that they can buy ... and provide an environment that stimulates them to buy. Don’t take our markets away!
• When people feel that tomorrow will be better than today, when the uncertainty about tomorrow is replaced by confidence, they will begin buying more goods made by our companies.

2. Eliminate all business taxes except usage taxes.
• The business is the “golden goose” whose efforts eventually create jobs. Taxes on businesses take dollars away that could be spent on job-creating efforts. The business of a business is to fulfill a customer need/want. They should not be impeded unnecessarily in doing that. Taxes should be paid by people, not the job-creating enterprise. (This includes taxing of inter-state services.)
• Dollars not used for taxes can be used for R&D, new product development, seeking new customers, increasing manufacturing capability ... and hiring new workers!
• Tax individuals ... not the job-creating entity.

3. Re-institute Accelerated Depreciation, which will incent capital expenditures funding expansion, increasing capacity and thus driving down prices. The Institute for Policy Innovation estimates every $1 of depreciation deductions generates $9 of output growth.

4. Insure a supply of trained workers ... by providing grants for hiring/training/re-training, or funding technical schools to do that training/re-training.

5. Invest in NEW Infrastructure ... infrastructure that is key to tomorrow’s competitiveness (broadband, etc.).

6. Reduce the costs of Regulation.
• Regulation is important ... it assures minimum standards. Regulation should be cost-justified against the benefits.
• Example: Eliminate multi-state duplication of licenses.

7. Corollary: Reduce/Don’t Increase the administrative and tax costs of having an employee.
• This is why it’s important to control rises in Health Insurance, Social Security, Medicare, and other societal benefits.

8. Corollary: Increase/Don’t Reduce the incentive to work.
• Insure it’s not more beneficial to collect Unemployment Compensation than to work for available wages. Keep a large differential between them.

9. Don’t play favorites. Keep the playing field level.
• Examples: Davis-Bacon, Employee “Free Choice” Act, etc.

10. Provide grants to incent basic research which might lead to development of patentable, commercializable ideas.

11. Stop creating uncertainty around interest rates, availability of capital, and costs of employing workers. This uncertainty results in postponed expansion efforts.
• Control interest rates at low levels and without volatility to reduce barriers to capital investment borrowing.

12. Foster globalization. Don’t impede it.
• All economics is about Comparative Advantage. Let everyone do what they do best, and let the buyer/user judge whether to buy/use or not.
• Many of America’s jobs depend on export business.

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