OpEdNews - Page 2 of Article: A HUMAN INVESTMENT TAX CREDIT PROGRAM

1. Employment policy needs to be based upon several ideas that are not adequately understood.

a. Employment policy should be oriented towards small employers and small business.

b. Employers must be viewed as a vital part of the employment picture. Present policies speak of creating jobs without looking properly at the situations facing individuals who create jobs.

c. Employment and unemployment should be viewed as a national market relationship comprised of tens of thousands of smaller market components. Policy should be designed to reach forward to an effective employment total of 150 million persons. Unemployment may be viewed as evidence of an unbalanced market situation. It is the logical result of public policies that interfere with or discourage and hinder some people from employing others. It may also be viewed as a situation with insufficient incentives for some people to expend the effort and money needed to succeed as employers of others.

2. The broad objective for a proper employment policy may be defined as total employment or overfull employment under conditions of price and monetary stability. Social conditions can be created whereby jobs are available for everyone.

3. Employment policy should use three complementary methods of protecting and developing jobs and minimizing unemployment. First, eliminate a wide variety of deterrents to job creation. Second, encourage and foster job development through devices such as tax credits. Third, lessen unemployment by reducing incentives that encourage idleness and unemployment.

4. A major policy initiative would be to free very small employers, with up to four employees, from the requirements of reporting and collecting social security, sales, and income taxes; and also from local taxes designed to raise revenue rather than assure health and sanitation compliance. They should also be freed from many other types of government and outside interference in employer-employee relationships. No employer of up to four people can exercise unfair domination over employees if alternative job opportunities are readily available. There should be no interference with small details.

5. The major way to encourage job developments is to use job tax credits. A brief summary:

a. A $2,000 per person tax credit for existing employees. This credit would be limited to $8,000 for an individual and $40,000 for a corporation.

b. A $4,000 per person tax credit to employers for hiring additional people. This credit would be $6,000 per person where individuals hired are under 20 years of age. Such credits would be limited in amount for each employee to perhaps $40,000 per year for an individual and $200,000 for a corporation.

c. A $2,000 maximum tax credit per person to provide a Workshare Bonus to employees who work short weeks and thereby spread available employment.

d. An $8,000 maximum tax credit for self-employed individuals to help facilitate self-employment.

e. A $2,000 per person training credit to employers who participate in training programs to improve job related skills of employees. Again the amount would be limited with primary encouragement to small business.

f. A $2,000 credit to corporations to match or stimulate expanded equity ownership by employees.

6. A major rationale for a broadly based, limited size job tax credit lies in the fact that a high proportion of small employers are short of capital needed to support continuing and growing employment relationships. It is therefore counterproductive to tax incomes of those who provide jobs and thereby limit their chances for success or growth. Job tax credits allow employers to retain earned income to create more jobs.

7. A second reason for job tax credits arises from the minimum wage laws. A substantial portion of teenage unemployment can be attributed directly to such laws. As long as they are necessary and in force, the costs which they impose on individuals should be paid in some way from the public purse. This would be the only way to offset or lessen the unemployment which such laws produce.

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