Tag Archives: Tax credit

When Liberals unwittingly apply conservative economic principles . . .

The principles of capitalism work and have raised more people from poverty than Communists and Socialists ever dreamed of.  And even though Liberals literally fail at basic economics, every now and then they accidentally get one right. See Official: NY tax breaks would apply to ‘Tonight’:

The bill expected to be voted into law in coming days would provide a 30 percent tax credit for a “relocated television production.” Past and current tax credits have gone to new productions starting in New York, such as “Law & Order.”

Hmmm . . . so if you lower taxes, a business will be more likely to come to your location. Shocking.  And it stands to reason that if you raise taxes then more will leave.

Are the NY officials being irrational by offering the tax break?  No, because they realize that luring the Tonight Show will have all sorts of other benefits.  Too bad they don’t apply that across the board.

When you consider how the same behavior applies to countries you can see why jobs get outsourced (it isn’t just the wages).

Another waste of taxpayer funds by people who don’t understand business

Government employees who have little, if any, business experience are bound to come up with wasteful ideas.  Here’s another one:

Via Obama Announces $33 Billion Hiring Tax Credit for Jobs – ABC News.

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:

  1. 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.
  2. 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.