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How to Create More
Jobs, America
by
Steve Selengut
My recent survey produced a variety of ideas, but most of them had
these common elements: replace the Internal Revenue Code with a
simpler model, encourage businesses to increase employment, and
insist upon tort reform everywhere.
It also brought two disturbing realities into focus: We are
painfully apathetic (less than 1% of the people I contacted took the
time to respond) and, although we have great problem-solving ideas,
few to none of them are included in any of the reforms being
considered by congress.
For those who participated, thank you again. I hope that you will
appreciate how I've synthesized your thoughts and suggestions into
the commentary. I also hope that you will find the time to address
some of these issues more aggressively with blogs, networks, and
elected officials.
Major changes are being proposed in six inter-related areas. All the
dots cannot be connected in one article. Government revenue is cut
in this article and the next without a hint about a replacement
plan. I'll get to that later, and painlessly for all of us.
So how do we create more jobs?
Perhaps the first step in creating more jobs is to take a giant step
backwards and define what a job is. In the simplest of terms, your
job is the principal moneymaking activity in your life.
The more qualifications and skills you have (physical, technical,
intellectual, etc.) the more valuable you are to employers,
customers, and clients. Thus, more practical, job specific,
education becomes a vital part of the jobs picture.
For the self-employed, the amount of effort expended, marketing
skills, and the product or service itself is as important as the
qualifications. But the objective of the job, the career, and the
company, is to make money.
Government jobs are of a service, regulatory, and social problem
solving nature--- unquestionably necessary, but the primary motive
is not to create personal wealth or economic gain, hence the
thousand-dollar toilet seat scenario. These jobs are paid for by
taxes collected from all employed people--- except our friends in
the "underground economy", who pay virtually no taxes at all.
The more government jobs, the more taxation; the more government
regulation, the more need for cost analysis of the regulations
spewed forth. Consumers ultimately pay all of the costs of
compliance, everywhere.
Most self-employed people start off working for others; large or
small really doesn't matter. What matters is that employers hire
these people to make the enterprise more productive, safer, more
efficient, and more profitable.
In theory, employees must contribute to profitability, and each is
compensated based on his or her contribution, as determined by the
owners of the enterprise. In larger organizations self-serving
executives are able to pillage the profits of the enterprise, to the
detriment of both owners and employees.
Employee benefit programs (health & dental insurance, pension &
savings programs, investment education plans) were originally
implemented to attract and retain the best employees.
Today, employers are reluctant to create jobs because the mandated
non-productive "overhead" associated with each worker adds
significantly to the cost of running the business--- worker's
compensation, unemployment insurance, OSHA compliance, liability
insurance, social security contributions, minimum wage/union pay
scales, etc.
No job deserves to exist economically if it doesn't add to the
profitability of the business. The more costs per employee, the
fewer jobs get created. So how do we create more jobs in this
environment?
Corporate Income and Nuisance Taxes.
Politicians have succeeded in demonizing the large corporation by
exploiting the greed of obscenely overpaid executives and employees,
while ignoring their own complicity in the conflicts of interest and
lobbyist graft that steer the legislation they produce.
What Congress, a long line of Presidents, and much of the population
have lost sight of is the fact that even the dirtier businesses are
job providers. They must be pampered, not pummeled; supervised and
reined in but not tethered and broken.
Business income taxes are 100% inflationary; costs associated with
employees (yes, even the minimum wage, which some suggest is the
cause of our illegal alien problems) result in fewer employees
hired. Period. Capitalism is not broken--- its success formula has
been compromised.
Repealing the corporate income tax, and prohibiting any and all
levies, fees, charges, and taxes on any form of business could
instantly produce millions of job openings, lower prices, and create
new business opportunities throughout the economy.
Repealing business income taxes would instantly make export products
more competitive in world markets, as businesses reduce prices while
maintaining profit margins. Greater profits should translate into
growth in economic activity.
Finally, the elimination of these taxes would make all businesses
run more effectively because there would be no need to spend money
(or create losing transactions) just to cut the tax bill.
Government Programs:
Tax dollars can create jobs when they are used to: protect consumers
and businesses from fraudulent and disruptive forces, fund
infrastructure repairs and improvements, protect shareholders from
greedy officers and directors, provide free education to the most
talented students in all fields, and provide seed capital for new
public interest development projects.
-------------------
Still looking for your ideas on: growing consumer spending, lowering
health care costs, helping the environment, reducing the size of
government, and producing a fairer tax environment.
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Last modified:
January 01, 2010
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