On Taxes And Jobs

Our governmental policies and tax laws reflect an earlier, simpler time Back then more income meant more employees. Now not so much.

I’m not an economist. Duh!

Still some of what I hear over the federal budget battle seems a little hard to swallow. Specifically I’m talking about raising taxes and how that affects job creation. The mantra from Republicans is lower taxes go directly into more jobs.

As it turns out there was a tax decrease on airline fares this weekend. When the FAA charter wasn’t refunded the taxes and fees it collected expired. Let’s see how that worked out.

Airlines are tossing consumers aside and grabbing the benefit of lower federal taxes on travel tickets.

By Saturday night, almost all the major U.S. airlines had raised fares to offset taxes that expired the night before.

That means instead of passing along the savings, the airlines are pocketing the money while customers pay the same amount as before.

American, United, Continental, Delta, US Airways, Southwest, AirTran and JetBlue all raised fares, although details differed. Most of the increases were around 7.5 percent. – San Francisco Chronicle

Maybe the airlines looked at this tax decrease as too temporary to use as a hiring trigger, but using it as an opportunity to charge more seems unconscionable.

Unfortunately, I also understand why it happened.

Businesses are there to make money. I can’t say I blame them. They’re doing what they’re supposed to do. But we can’t look at them as what they are and through rose colored glasses simultaneously.

Our governmental policies and tax laws reflect an earlier, simpler time Back then more income meant more employees. Now not so much.

One of the major reasons for a spike in unemployment is fewer people are needed to produce the same work product. When you call a company for service or help and have your problem fielded by computers (or lower paid workers somewhere halfway around the world) you’re seeing a cause for unemployment firsthand. Companies are benefiting from this increase in productivity. They’re keeping that gain all to themselves.

A company’s interest is best served by producing a good or service for the minimum price. Maybe their interests and our society’s interests aren’t aligned anymore?

If we want more employment we’re going to have to add incentives that recognize full employment isn’t the employer’s natural goal. Certainly we’re going to have to take another look at incentives that actually work against full employment.

When banks swallow banks or AT&T swallows T-Mobile will layoffs follow? Unemployment costs our economy. Who’s paying for it? I sense it’s not the swallowing bank or AT&T. In the end our economy picks up the tab. The cost is shifted from them to us.

I agree with Republicans who say we shouldn’t penalize job creators. We shouldn’t. So maybe it’s time job creation itself was part of the equation in who got tax breaks. Not everyone deserves a break.

Prove you’re a creator and I’ll do what I can to help you. Otherwise, pound sand.

Like I said, I’m not an economist. However, I recognize BS when I see it.