So our economy is in the shitter. Its been in the dumps for 4 years now. No one is doing as well as the public thinks except for the banks. The jobless rate is over 10% (reported), actual unemployment is closer to 15% in my opinion. More and more homes are teetering on the edge of foreclosure and new jobs aren’t being created.
I have a solution for the job creation issue. This is going to be the single most overly optimistic and potentially rife with problems solution, but could be the fastest solution as well.
I propose a tax credit. Every business under 10 employees will get an 18 month tax credit up to $50,000 for creating a new job. This tax credit could be spread across two positions and go up to $75,000 in value if two jobs are created. How would it work? You hire someone new, and show a net INCREASE in headcount (so you don’t fire someone first then hire another to get your credit), and you can deduct the value of that employee’s salary up to 50k or 75k for 2 employees total from your taxable income.
Hopefully I don’t need to explain to you the benefits to the government. The cost is actually far less than 50k per company to the federal government, as the tax rate of $50k is far lower than the benefit of increasing jobs and reducing the burden on unemployment and welfare systems. The increased production capacity given to these small businesses could result in long term growth as well for said employers.
Think my idea is dumb? let me know why in the comments and please suggest ways to improve it. I’m not an economist, I just like economics.