Every member of Congress is for jobs, and if political restraints prevent his voting for them he has a jobs plan of his own to prove that he’s for them. That is the current game in Washington, and it illustrates better than anything why Americans despair that their government can no longer solve problems.
The Senate Thursday night again stymied a part of President Obama’s omnibus jobs program. Legislation now needs a supermajority in the Senate—60 votes—and Republicans united to the last man and woman against it and were joined by two Democrats, Mark Pryor of Arkansas and, of course, Ben Nelson of Nebraska.
Over in the House of Representatives, every Republican, including Arkansas’ trio, oppose every part of the president’s plan, which includes large-scale infrastructure work on highways, bridges, schools and air and rail improvements along with business tax incentives and help for local governments to preserve the jobs of policemen, firemen and school workers until local and state government revenues recover. To avoid raising the deficit, the expensive parts of the plan would be offset by a small surtax on people who earn more than a million dollars a year.
Polls show that every part of the president’s plan is endorsed by big majorities of Americans even if the man who proposed them is not so popular. Anyone who votes down the line against the jobs bills must erect some cover for himself unless he represents a “safe” district.
So Sen. Pryor and Rep. Tim Griffin, the Second District congressman, trotted out their jobs plan last week. Well, Griffin didn’t have a plan, but he held a forum at Little Rock and invited business people to come out and say why the Republicans are right about jobs—that businesses aren’t hiring because their taxes are too high and regulations are too annoying. When you cut their taxes and regulations, according to Griffin, you will unleash the mighty U.S. economic engine and it will create jobs by the millions.
Pryor did have a plan, a beautifully illustrated eight-page plan, in fact, but it was mostly a hymn to the various regions and economic segments of Arkansas. If the government would help the Arkansas Research and Technology Park at Little Rock, Arkansas farmers, Arkansas water projects like the Grand Prairie and Bayou Meto initiatives, the state’s shortline railroads, Arkansas airports, the Highland Industrial Park in East Camden, the National Center for Toxicological Research in Jefferson County, the. . . . well, you get the idea. There’s something for every part of the state. His plan also includes lots of work on roads and bridges, like the president’s plan, but Obama is not mentioned. The president has been unpopular in Arkansas since the day he announced for president in 2007 and no Arkansas Democrat wants to be seen embracing the president.
But Pryor’s is a jobs plan. If every member of Congress had a similar jobs plan for his or her state and if the government could find the trillions of dollars to do them all, millions of jobs would no doubt be created.
Griffin’s “plan”? Not so much. Arkansas Republicans, including Sen. John Boozman, say the Obama plan is not worth doing because the jobs it would create would be only temporary. When the big Interstate 430-630 interchange in west Little Rock is finally finished, those jobs will be over. So?
Griffin’s plan is the Republican plan: lower taxes on corporations and people with lots of money (the “job creators”), eliminate health, safety and pollution regulations that hold back industries and do some form of “tax reform.” The businessmen and lawyers that Griffin invited to his jobs forum generally adopted Griffin’s line.
A corporate tax attorney said, “We’ve got the highest corporate tax code in the world.” Reducing corporate taxes would prevent jobs going to other countries, he said.
But he will get plenty of dispute about that. President George W. Bush’s Treasury Department did a study of global tax rates four years ago and reported that “the United States takes a below-average share of corporate income in taxes” compared with other developed countries. A more recent study concluded that in only one of 26 developed countries (Iceland) did corporate taxes take a smaller share of GDP than the United States. You see, no company pays 35 percent of its net income in taxes (the top rate) because of loopholes. A study this year by Citizens for Tax Justice shows that 12 of the most profitable U.S. corporations collectively paid an effective tax rate of minus 1.5 percent over the past three years. That means they paid Uncle Sam no taxes but rather was paid by the government.
If corporate taxes are so high that they discourage investment and hiring, why are corporations sitting on a record cushion of more than $2 trillion.
No, cutting corporate taxes and taxes on high incomes will not create jobs. Corporate and marginal personal income tax rates already are near their lowest since the beginning of World War II. If cutting those taxes creates jobs, why did it not happen in 2001-04 when individual and corporate taxes were slashed repeatedly and the tax cuts were followed by the worst jobs record since World War II? Congressman Griffin cannot find one example in our history where slashing taxes produced a big surge of hiring. All they can say is, well, there was some economic growth some years later so maybe the tax cut had something to do with it.
Here’s the self-evident truth about job creation. Businesses will create jobs when there is a solid demand for the goods and services those employees would produce. They won’t do it for any other reason. Every business, like each one of us, would enjoy paying fewer taxes. But taxes have nothing to do with our 8.3 percent unemployment rate. Absolutely nothing. If members of Congress can ever divest themselves of the myth they are on their way to a remedy.
