Obama's Employer Tax Break for Jobs does not require employers to hire U.S. workers

The Obama administration released details on their tax cut for businesses which hire and increase wages.

Get what is missing? Tying the tax cut to U.S. citizens, LPR. This means there are no restrictions on offshore outsourcing of jobs or displacing more Americans using guest worker Visas, a notorious practice using H-1B, L-1 and H-2B Visas.

There is no mention of ensuring that employee exists on U.S. soil or is a U.S. citizen, green card holder. There is no mention of stopping the use of the tax cuts when importing more foreign guest workers. Currently we literally have story after story of employers importing even more foreign guest workers with this kind of dire jobs situation. Just the other day a grocery, literally imported foreign guest workers on H-2B Visas for jobs while the town has people going homeless and an official 14% unemployment rate.

When, when, WHEN will people get economic reality that the United States cannot be the world's job market. No, we really can't and if 1 in 6 Americans cannot get a decent job doesn't tell ya that fact, you must be smokin' crack. Keep smokin' it, for hallucinating is the only way you'll see labor demand curves slope upward.

Here are the details of the plan:

  • Businesses will receive a $5,000 tax credit for every net new employee that they employ in 2010.  The total amount of the credit for any one firm will be capped at $500,000, to ensure that the majority of the benefit is targeted at small businesses.  Start –ups will be eligible for half of the tax credit.
  • Small businesses that increase wages or hours for their existing employees will be reimbursed for the Social Security payroll taxes they pay on real increases in their payrolls.  This bonus would be based on Social Security payrolls, so it would not apply to wage increases above the current taxable maximum of $106,800.
  • Firms will be able to claim the credit on a quarterly basis, which gets money out to businesses quickly and provides and early incentive to hire and increase payrolls.

The plan is expected to cost $33 billion dollars.

Here is the CBO estimates on most bang for the buck. Now this payroll tax holiday looks like a great idea but guess what the CBO does not consider, globalization. They do not take into account U.S. taxpayer dollars being used to create jobs....for citizens of other nations.

This is a real problem! If you do not believe me, just look at the overall growth in labor force and the overall decrease in the number of U.S. based jobs.....and....our friendly neighborhood unemployment rate. Also bear in mind the BLS counts guest workers in occupational employment rate estimates.

This is not your plain vanilla private enterprise situation here. This is U.S. taxpayers money, U.S. debt and a temporary program to get Americans back to work.

Please do not let this administration enact another policy that literally is a money sieve, pouring out to other nations instead of America.

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Schumer/Hatch have a payroll tax holiday plan

It looks pretty good, except for a few things...

firstly they must once again define "eligible worker" as someone with U.S. citizenship/LPR only, on U.S. soil is the worker...

But there is another question here and this is the problem with all these tax cuts.

Anyone knows, who deals with their own finances, you are not going to take advantage of a "tax cut" unless you already have profits and need something.

You are not going to buy a home with an 8k tax credit....
unless you need it, most importantly can buy a home and also believe you will not lose your shirt with prices going lower. You may sit like a vulture at auction sales...

but the people who really need housing, well, they do not have the money to buy a home in the first place.

Kind of the same thing. If business is dried up and you really don't need more people to do your business, you are not going to hire someone.

Still if they tie "eligible worker" to U.S. citizen/LPR one element which is not being talked about, this gives a 6.2% cost reduction...

which might be the edge to get some companies to hire Americans instead of importing foreign guest workers or offshore outsourcing that job.

In other words, it might assist with unfettered global labor arbitrage, but again, this is only if our Congress/administration grows a pair and makes the requirement for "eligible worker" be Citizenship status.

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I have a better idea.

It's not actually mine but I like it and it makes sense. I will cross post it from rebelcapitalist.com today. Hint: similar to Schumer/Hatch

RebelCapitalist.com - Financial Information for the Rest of Us.

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tax credits for employers

You want a better idea for stimulating this failing economy? There are approximately 300 million people in this country. Obama spent over $787 BILLION last year to stimulate the economy. What happened? We lost MORE jobs and incomes. How about taking all the adults over the age of 18 and sending each of them a stimulus check? Assuming that number would include approx. 200 million people, we spent $3935 per person on last year's stimulus effort, and what did the American worker get out of it? More unemployment, less security, and more foreclosed homes. Oh, I get it, "we" are not smart enough to understand all the ramifications of individuals having enough money to pay our bills that big business and the GOVERNMENT keep handing us. Oh well, guess we'll just starve to death outside.

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