Ok, this one is a bit surprising, as it expires before the next election, but Obama has come out with a proposal to lower taxes in the social security area, from 6.2% to a new one year rate of 4.2%.
Ironically, when the US needs to generate as much tax revenue as it can, so it can lower its deficit and by doing so lower the strain on the US Treasury market, Obama is suggesting a surprise tax cut.
While this will help those that are employed and paying SSN, it will not stimulate the economy in a way that should generate new jobs. The rate of inflation in ex core inflationary areas, such as the products people actually use is going to be significantly higher than this tax cut will provide.
It will be interesting to see if this is used as a bargaining chip the sunset aspects of the Bush Tax Cuts.
Currently there is very little to go on, so I don’t have more to add. However, as details are leaked or released officially, I am interested in seeing how this plays out.
Obama needs to figure out how to stimulate jobs growth, and that means reaching down to the small business owners of America and helping them. Nothing I have seen from his administration so far has helped to address long term jobs growth.
Ironically, everything that is being done so far, has been for special interest groups who do not share the same capitalistic agenda’s. The Obama administration is going to need to get out the history books and relearn what drives jobs growth in America, and than help that sector above everyone else. Until they can realize that jobs don’t come from union dues, they wont understand how to grow jobs in the economy.
There has to be a business owner willing to risk his capital, for a reward, for a new job to be generated. Its really that simple. If you keep attacking the hand that feeds you, you wont get far. This lesson has not been learned yet, in my humble opinion.
Providing a short term tax cut to an underfunded liability is not going to generate jobs that pay more taxes.