Friday, September 25, 2009

Time for the Government to get Creative

The US government is talking about a “jobless recovery” like it’s something that exists. A jobless recovery -- where the price of everything goes up -- from stock price to home prices to the price of bread in the store is not a recovery. It’s inflation. The value of the dollar is not up. It’s down -- consistent with inflation, not recovery.

With the unemployment numbers so high, 13 states are going to the federal government to ask that unemployment benefits be extended. Obviously for the families who need income to survive, this request is necessary and seems to be the best short-term solution.

But the government cannot keep funding a jobless recovery by creating government jobs and extending benefits. It’s time for them to get creative about driving a jobs generation campaign.

Companies that stay in business for more than three years, and which in that time grow their business year-over-year have a significantly improved chance of lasting long-term. I would like to see the US government enact a creative tax ladder for new businesses whereby they would only pay half the taxes due in year one; if their net revenue has increased in year two, they only pay half their taxes in year two. And if by year three, their net revenue has grown year-over-year against year two, and they have hired at least one additional person full-time, they would owe their full taxes in year three but receive a write-off equal to the other half of their year-one taxes.

Essentially, under this plan, new businesses would receive a new business tax discount equal to the taxes they would have paid in year one and half of year two, but by year three they would pay full taxes and have created a minimum of two jobs. And to qualify, they would have had to generate an increase in net revenue year-over-year for three years, so the taxes owed in year three would be more than years one or two.

Do you have a creative idea for the US government to create more private sector jobs, or do you think it’s better to just keep expanding government and extending benefits until there are more people requiring help than those left employed to help?

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