More stimulus.

[piece-itpete]

This is the most stimulating government we've ever had lol.

What got me was how CBS fawned over it this AM. Ag, it makes me feel dirty. Someone please tell me the MSM isn't at least a little left leaning ....

Pete

[Boreas]

Originally Posted by piece-itpete

This is the most stimulating government we've ever had lol.

What got me was how CBS fawned over it this AM. Ag, it makes me feel dirty. Someone please tell me the MSM isn't at least a little left leaning ....

Pete

All you have to do is look at who owns the networks to see that it isn't.

Hey, you don't suppose the MSM like the new stimulus because it's a good idea, do you?

Nah!

By the way, Pete, the central program is a corporate tax break. I thought you guys like those.

John

[piece-itpete]

I done seen it with my own two eyes John

I thought you guys hated corporate tax breaks!

Pete

[JJIII]

"I thought you guys like those"

"I thought you guys hated corporate tax breaks!"

What everybody likes is votes.... Good of the country be damned, gimme your votes!!

[d-ray657]

As long as the tax breaks are directly tied to hiring people, I'm OK with them. If these are only going to go into the corporate coffers or into management's pockets, the way the stimulus money did, I dissent.

Regards,

D-Ray

[piece-itpete]

Hear any of Our Leaders' last speech? "We stopped the bailouts!" or similar to cheering crowds.

Apparently those same crowds never heard of TARP etc.

Pete

[whell]

Originally Posted by d-ray657

As long as the tax breaks are directly tied to hiring people, I'm OK with them. If these are only going to go into the corporate coffers or into management's pockets, the way the stimulus money did, I dissent.

Regards,

D-Ray

First, the stimulus tax credit for hiring (the HIRE Act) doesn't create an incentive for businesses to expand their work force and reduce unemployment. The tax credit simply isn't significant enough to promote that level of activity.

The tax credit per hire is a reduction in the employers' share of FICA tax (6.2%) on wages paid from March 26 - Dec 31, 2010. Assuming a $50K annual salary, that would be a one-time credit of $3100 or less, depending on when the employee is hired. An additional $1000 credit against business income taxes is possible if the new hire is retained for 52 consecutive weeks. if the employee is retained for 52 weeks. Note also that the tax credit only applies if the employees who is hire:

- was unemployed during the 60 day period prior to their hire date
- is hired into a newly created job (i.e., not hired into a job that was vacated by an employee who left the company).

So, the scope of the credit is quite limited. Also, there will be additional costs to the company of tracking and applying for the credit, and costs at the federal level to administer the program. I suspect that these costs ultimately will either outweigh or reduce the value of the credits produced.

Our company provides support for businesses to qualify employees for the credit, apply for the credit, and track the tax impact. The number of employees who have qualified for this credit comes no where near the number of employees who have been laid off / downsized during the period for which the creditable wages are earned (not to mention the period of time since the current administration took office).

So, other than provide the ability for an administration to say that they "did something" to help stimulate employment, one must ask what true value was produced by such a program of targeted tax cuts.

Second. we've been told by the left that "Reaganomics" doesn't work. Lowering taxes only creates more debt, it doesn't spur economic activity.

So why, when we have an economy in free fall does the administration reach for a program of "targeted" tax cuts? Would such benefits have less costly to produce and much more wide - spread in their impact if there had been a broad - based, "permanent" reduction in business income taxes? Such a program would provide a lower cost environment for businesses to operate in, and provide for greater predictability in business / labor costs.

By the way, the geniuses in our state government decided that they wanted to spur economic activity in the state. They decided that Michigan should be "Hollywood East", and that the state would create a very low business tax environment just for businesses in media and creative arts starting in 2008.

The result? We certainly have increased the number and scope of film and production activity that is underway in the state. Its funny that Hollywood, however, brings in much of their talent to support these projects, including off - screen talent, because the talent pool in Michigan does not have many of the skills required to support these projects (though there are efforts underway to home-grow the skills required). So, once the production activity is completed, many of the jobs go back home to CA or NY.

Of course, in doing so, the state ultimately gave the middle - finger to the many business in the state who have been here for years and were saddled with an increase in state business taxation starting in 2008. The state of MI still has one of the highest levels of unemployment in the country.

Our President and our Governor also wanted to increase "green businesses" and green jobs. They subsequently offered grants and favorable tax treatment for businesses in related sectors to locate to MI and produce products for the "green marketplace". So, one example of this opened just up the street from where I live: http://ir.a123systems.com/releasedet...leaseID=403090

Now, this is all fine and dandy. However a grant to a business is just a targeted tax reduction in a different package. It is also limited in size and scope, and is contingent on the hope that the product / activity that the grant is intended to support finds a foothold in the market place and produces ROI. This may or may not be the case for some of these "green industries" and "green jobs". If the grant ultimately produces no long term ROI, then it is simply more tax money wasted. Also, isn't this just another form of "corporate welfare"?

Same question - if the state wanted to encourage business activity, and the increase of employment activity that typically results, why not decrease taxation across the board for all businesses?

[Boreas]

Originally Posted by piece-itpete

Apparently those same crowds never heard of TARP etc.

Pete

Apparently you've never heard of George W. Bush, etc.

John

[noonereal]

Originally Posted by Boreas

By the way, Pete, the central program is a corporate tax break.

John

and this is being done for political gain not economic gain

Tax breaks translate into pure profit nothing else

You want to stimulate the economy give money directly to the poor.

[noonereal]

Originally Posted by whell

Same question - if the state wanted to encourage business activity, and the increase of employment activity that typically results, why not decrease taxation across the board for all businesses?

because then you can't pay the bills