Building on what Mr. Gooch has written, with the coming higher taxes and extended unemployment rates, the Federal Government is not stepping out of the way to give private industry the incentive to create jobs. The fact of the matter is that without incentive and without an inevitability of profit, jobs will not be created and more may be lost.
The Federal Government needs to do the following to allow for the unemployment rate of 17% (I include "underemployed and those who have "given up") to fall:
- Allow the Bush tax cuts to continue beyond 2011. These cuts were a relief to small businesses and helped to ease the blow of the dip we took after 9-11. This country would have been in worse shape had those cuts not been in place. Thank you, W!
- Cut the capital gains tax. This will bring in new investors into the market and allow stock values to rise again as Americans know they will not be penalized when they bow out.
- Take the remaining of the "stimulus" and give it back to the American people in the form of a tax cut. Much of this spending has been wasteful and has historically proven,when looking at the New Deal, to be a flawed policy.
- Get out of the way! The Federal Government has been in the business, these past 2 years, of taking over large parts of the economy, between health care and the automobile industry. I question the knowledge of those now running the respective companies in how they will give products or services to consumers that are substandard or they do not want. These bumblings will cause further jobs to be lost down the road when they are proven flawed.
We could ask our representatives to do this, but (a) I doubt they will and (b) they are nowhere to be found this summer. So if they don't listen to us and get out of the way so that America can go back to work, we need to go shopping for candidates who will commit to that and speak our displeasure at the polls this November!
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Here's what I don't understand about incentives and cutting the capital gains tax. Maybe you can help on this point: When you talk about a reduction in capital gains tax rates bringing new investors (or more broadly, new investment) into the market, are you talking about individual/household-level investors and their incentives? If the prospect of next year's increase in capital gains tax rates is preventing these potential investors from actually investing their money, what are they doing with that money instead? What uses are they finding to be more worthwhile right now? Are those uses more financially worthwhile, or more worthwhile along some personal, harder-to-quantify dimension(s)?
ReplyDeleteObviously I'm assuming you're not talking about people who would borrow to invest if capital gains tax rates were not set to go up.