Government employees who have little, if any, business experience are bound to come up with wasteful ideas. Here’s another one:
Under the president’s proposed tax credit, businesses would receive a $5,000 tax credit for every net new employee that they employ in 2010. The total amount of credit will be capped at $500,000 per firm to ensure that the majority of the benefit goes to small businesses.
This is simple: While a few companies might hire employees they otherwise wouldn’t have due to these incentives, the vast majority of businesses fall into one of two categories:
- Business that don’t have demand for their goods and services and don’t need to hire. Even with a $5,000 incentive, hiring new employees means they’ll be paying more for wages than necessary. They won’t use this program.
- Businesses that were going to hire anyway. They had demand for goods and services but didn’t need the additional incentives. Sure, they’ll cash the checks, but what’s the point?
Leave the $$ with the taxpayers and let them spend it how they like. That will stimulate demand and lead to real hiring. Don’t give it to an inefficient government that will take its cut then waste the rest by giving it to companies that were going to hire people anyway.