Typical Obama, and indicative of a guy with zero experience in the real world who has no idea how or why businesses expand payroll:
President Obama made a fresh call Tuesday for another round of economic stimulus, proposing to spend more than $25 billion to offer tax breaks to companies to hire workers or pay them higher salaries.
The measure is Obama’s first proposal aimed at addressing the still-weak economy since his reelection and an acknowledgment that though it is no longer a political threat, the nation’s unemployment rate of 7.9 percent remains a significant problem.
The tax breaks would target small businesses and refund 10 percent of the cost of new payroll — in the form of new hiring or new wages — up to a total of $500,000 next year.
“This credit would help nearly 2 million small businesses and is focused on middle-class workers and small businesses,” officials said in a statement.
The proposal appeared in the president’s February 2013 budget request this year and, at a cost of about $30 billion, was rejected by Republicans. It appeared anew in a statement released early Tuesday calling on Congress to immediately extend tax cuts for middle-class earners that are set to expire at the end of the year.
Let me see if I understand this. Obama is proposing to dramatically raise taxes on small business by hundreds of billions of dollars over the next decade via the expiration of the Bush tax rates, hit them with an additional massive tax increase to pay for Obamacare, then give them a 10 percent tax credit for hiring workers they don’t need — if businesses needed to increase payroll, they wouldn’t need a tax break to do so. This sounds like the kind of crack economic thinking we’d hear from Obama’s head of the SBA. You know, the women who insisted a few days ago that Obamacare isn’t adversely affecting small business. Earth to Obama: Businesses will only expand payroll if and when they expect a sustained increase in demand for their product, not because of some temporary gimmick proposed by the most anti-business administration in history.
I have no doubt that any business already planning on expanding payroll will take advantage of this scheme, but the notion that businesses who weren’t planning to expand will change their minds because of it is silly, and an indication of just how ignorant Obama is about how the private sector works. I have a better idea. Let’s have a sane energy policy, repeal Obamacare, and end the uncertainty in the markets by reforming entitlements and making the current tax rates permanent … for everybody. Any plan to address the nation’s chronically high unemployment rate which doesn’t include those components will meet with the same success (or lack thereof) as Obama’s previous plans to spur the economy.