Wednesday, December 19, 2012

Job Creators

Conservatives would like to keep tax rates low, in particular for the wealthy; their belief is that these individuals are job creators, and increasing their taxes will discourage job growth. They also want to reduce spending by the government to bring the deficit down; they claim this will increase confidence and therefore increase business investment and economic growth.

Progressives would like more spending on things like education, infrastructure, rebuilding our country; they believe that increased revenue from increased taxes is one way that we fund that spending. They believe that spending on programs that directly create jobs, while contributing to the deficit in the short term, is an investment that creates pays dividends in the long term, in the form of economic growth.

It's not easy to connect cause and effect between either of these approaches; it's not easy to demonstrate that one set of policies works well, and another does not. We have research data that can help understand past effects, however the data is used selectively and with breathtaking levels of misrepresentation by partisans, as opposed to adding anything resembling clarity. Good luck preaching to anyone but your own choir.

So, let's make it easier to understand, and possible for everyone to win: rather than limiting tax deductions for charitable contributions, expand that category to include contributions to education and infrastructure programs. Give money to your state to keep police, fire fighters, teachers working, and to hire more of them. Build roads and bridges. Create a national program to bury our antiquated system of overhead power lines so the next hurricane doesn't result in power-outs and fires.

Let's have the so-called "job creators" actually start creating some jobs that everyone can see.

As individuals make higher contributions, reward this with reduced marginal tax rates. Make the maximum contribution unlimited. For every dollar donated directly to job creation, the government reduces spending by the marginal tax rate of the contributor plus 10%, to account for a multiplier effect that progressives claim will occur.

So that the deficit goes down, and your taxes need not go up to fund government stimulus.

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