Dear President Obama/Governor Deval Patrick/Senators John Kery and Scott Brown,
I hope that you are doing well. As a citizen who is concerned about the state of our economy, especially on the jobs front, I would like to offer you a suggestion on how to create more jobs, both in the state and on the federal level (please feel free to share this idea with President Obama and Congress). As I understand, the GOP argues that by giving tax breaks to corporations, this would create more jobs, via the theory of Trickle-Down Economics. Of course, this is simply false; as someone who has a degree in Economics (Bachelor of Science, Boston University, 2011), I understand that marginal employment is directly correlated to the direct relationship between the marginal output per each potential employee and the marginal cost per employee (salary, benefits, etc); this decision is not be impacted by taxes at all.
Of course, the GOP will argue otherwise. Why don’t you pressure Congress to enact legislation to investigate how valid their claim really is? Here is my suggestion: At the beginning of every year, compare the net jobs growth/deficit for each corporation that has made over a million dollars in EBIT (Earnings Before Income and Taxes) profits per year. If they have laid off more employees than they have hired (a jobs deficit) within the past year, increase their taxes (perhaps by 5%), or at the very least, close the Bush tax cuts for them. However, if they have added more jobs than they lost (jobs surplus) of say, at least 5%, allow those companies to keep the Bush tax cuts. Reward companies who have added significantly higher numbers of jobs by giving them even lower tax deductions, while punishing profitable companies who have cut labor by significant amounts by increasing their taxes. You can even categorize types of employees added, with extra benefits for companies who say, hire more middle-aged long-term unemployed or college graduates.
You can also utilize a similar approach for companies who outsource. Provide financial incentives for companies to keep jobs at home. Increase the tax rates for those companies who outsource a significant percentage of their labor force, but provide tax breaks for those companies who hire a significant percentage of employees at home. This way, you would be rewarding companies who keep jobs at home, while punishing those who ship jobs overseas.
President Obama/Governor Deval Patrick/Senators John Kery/ Scott Brown, I believe that this solution could and would add jobs to our economy. Take this argument to the public. Both the Democrats and the GOP favor job creation, right? Their claim of cutting taxes to add jobs would still hold…for companies who are, indeed “job creators”. On the other hand, irresponsible but profitable corporations, who cut jobs or ship them overseas, would not have this benefit. Democrats win by creating jobs and rewarding responsible companies. The GOP wins with corporations that would get rewarded with tax cuts by being able to claim that tax breaks are working for the companies that add jobs. The American people win because more jobs are created at home, improving the economy.
Please let me know if you have any questions about these ideas. I would be glad to discuss these further. You can reach me via email at igorny@bu.edu or by phone at 617-308-1566.
Thank you for your time.
Sincerely,
Gary Gorny
