Sunday, June 26, 2011

7 million new jobs in 7 paragraphs

Man Robert Frank is ON FIRE in his Economic View column. The whole thing is 16 paragraphs, but in grafs 6-12 Bob lays out how we can get "more than 7 million" new jobs by the end of 2012.

I can boil his 7 grafs into 3 words:

payroll tax holiday

Yessirree Bob; it's just that easy. Cut the employee rate to zero and cut the employer's rate to zero for all new hires from now to the end of 2012.

I am in favor of cutting the payroll tax permanently, not just for 18 months, or so regardless of how many jobs it creates, but I am amazed that (a) Bob Frank is advocating this policy, and (b) that he is so sure that the resulting employment gains would be so strong.


2 comments:

Tom said...

Eventually (my guess: 4 seconds) the existing work force will realize that the favored "new hires" are getting MUCH more money for the same work. They (and their employers) will see an advantage to severing their current relationship to get the 7% bump from the new-hire status.

The effect is much stronger for low wage workers, not least because the payroll tax is regressive. People who can't get the Deal will feel cheated and inclined to vote against the incumbent (that's the good news!)

The other good news comes when the payroll tax is reinstated. Everybody affected will be shocked to finally realize just how much government costs: vote against the incumbent!

It'd be far better to implement a plan that's fair and uniform -- and also exposes just who much government costs.

Anonymous said...

Interesting perspective. http://www.nationalreview.com/corner/269906/problem-payroll-tax-relief-veronique-de-rugy