There has been a lot of talk recently about the Obama administration’s proposed tax credit for job creation, and today’s NRO editorial gets it exactly right. If the administration and congressional Democrats have finally recognized that reducing taxes on businesses will spur economic growth, that is a welcome development. On the other hand, NRO is correct that the proposed tax credit is the wrong way to create jobs.
House Republicans continue to reach out to the White House in hopes of enacting responsible policies that will boost incentives for work and investment; but gimmicks like the jobs tax credit do not fit these criteria. There are far more effective and less complicated ways to create jobs and grow the economy, such as slashing tax rates on income, investment, and payrolls. Just last week, a Democratic pollster, Geoff Garin, found that 81 percent of Americans believe the Obama administration needs to do more to deal with unemployment and job loss. That’s why the House Republican economic working group (which GOP leader John Boehner appointed, and which I chair) continues to stress policies focused on small-business job creators, and solutions that provide real incentives to hire workers.
During the stimulus debate, the working group developed (and I handed the president) a jobs-focused proposal that would have, among other things, lowered the effective tax rate on all small businesses by allowing them to exclude 20 percent of their overall income from taxes. If the administration and Democrats on Capitol Hill have finally come around to recognizing the factors that drive economic growth and job creation, we look forward to having a full and open discussion about policies that will actually put Americans back to work.
– Rep. Eric Cantor (R., Va.) is Republican whip in the U.S. House of Representatives.