Job Creation Requires Capital, Not Bureaucracy
By Benjamin Pacini • Thursday, September 17, 2009 2:12 pm
The president seems intent on restoring the economy, and fixing health care—and I take him at face value when he seems sincere. Fortunately for him, creating jobs and fixing health care go better together than apart. By fixing the most egregious problems in our health care system, we would create jobs; and by getting rid of the job-killing aspects of our economic system, we could help fix health care. For example:
1. Eliminate the Capital Gains tax
If taxing smoking reduces smoking, then taxing investment will…? Not only are capital gains taxes a double-taxation on those that have already paid, it is a tax on behavior that we ought to be encouraging. This is a no-brainer: we want to spur business creation and job growth, not tax it.
2. Kill the Death Tax
The death tax creates a perverse incentive: in the last few years of life, a person has the incentive to spend their money rather than pass it on to their family. The last thing that any family needs during funeral preparation is a bill from the federal government, but the death tax isn’t just cold and unfeeling—it also kills jobs. When people save, they are keeping money in the bank, which loans it out to build homes, start businesses, and create jobs. Saving money means more financial stability, and it means more job-creating investment.
3. Drop the Corporate Tax
Corporate income tax revenues only account for 2% of GDP. Despite the fact that the revenues are small, class-warriors insist on taxing corporate income. If foreign competitors are getting a 12.5% tax in Ireland, and our companies are getting a 35% tax here, then they won’t be able to compete for long, all things being equal. Getting rid of the corporate income tax would be an excellent way to stimulate the economy.
4. Eliminate Monopolistic Structures in Health Care
If I want to open a Subway restaurant, I can do it anywhere I think I can make money. If I want to open a doctor’s clinic, I may have to get a certificate of need. I may have to jump through flaming hoops. I will have to sign ridiculous documents. If we’re struggling with a lack of doctors, then getting rid of bureaucracy is always a good way to go.
5. Stop Demonizing the “Rich,” Employers, and Profits
Profits are income for the every day person. When the media says “billions in profits” what they mean is “your 401(k) is growing.” When they say “obscene profits” they mean that “millions of Americans’ pension plans are now more secure.” These savings go to investment—building America’s economy. Populist speech gets people angry, and at the wrong people.
6. Tort Reform is Good. Rent-seeking is Bad.
If the president is serious about fixing health care, there is an olive branch that would speak loudly to his opponents: tort reform. Rent-seeking is anti-growth in all of its forms; this can sometimes refer to businesses, but nearly always refers to social parasites—including the various trial lawyers associations that are against tort reform.
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I have a new line of diesel engines that I would like to begin manufacturing but I can't find the needed capital. We have become a nation of money changers and our ability to provide jobs by making things is in real trouble. If we don't start investing in good manufacturing jobs, I am afraid we will look like Mexico in another 20 years.
>> Kenneth Buck September 21, 2009 4:35 pm
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