"The War on Jobs"
This is how Mike Murphy brilliantly sums up the vector of federal economic policy on the most recent Ricochet podcast. The latest example: Congress stands on the brink of reversing a fifty-year practice of treating partnership gains like long-term stock gains for tax purposes. Unsurprisingly, The New York Times avoids an argument on the merits by mischaracterizing the policy as a “loophole”, ironically insisting that retroactively increasing taxes on job creators to fund unemployment benefit extension is the way to help the legions of long-term unemployed.
Some senators, including Democrats, have balked at an unrelated provision that would begin to close a tax loophole enjoyed by some of the richest Americans. You heard right. Desperately needed unemployment benefits have been held hostage to a tax break for the rich, and the Senate’s Democratic leadership has had to delay and finagle to get its own caucus in line.
A personal story: ten years ago I started a small partnership, which I have yet to earn a penny from, and through it created a new company. My money-losing start-up now has 70 employees and we are actually adding headcount this year. I own my founder's stock indirectly through a partnership "carried interest," so if I am successful Uncle Sam will now assess me more than double the tax faced by either 1) my wealthy Obama-supporting investors; and 2) the employees that I hired and work with side-by-side.
Don't expect the unemployment rate to start dropping anytime soon.
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Comments :
May '10
Re: "The War on Jobs"
All you can do is shake your head. Larry Summers and Christina Romer know better. So does, for that matter, Paul Krugman, but he is sold on the class warfare theme.
In my world, new technology is used to create new companies. The lifeblood of those high-tech start-ups is provided by angel investors- in fact we have local groups of well-to-do guys who make RAIN (regional angel investment network).
The single most appalling aspect of big media is the fact that the "journalists" perpetuate the fiction that "the rich" put their money under the mattress or in a bin like Uncle Scrooge.
Capital investors are not stupid- they put cash to work by investing in high risk ventures because they care about the community and, well, jobs, and if they make something too, great. These are the people who make others prosperous, not the other-peoples-money-gambling parasites on Wall Street.
Except when Ivy League lawyers who know zero about business and economics, but a lot about union donations, are in power- then they go to ground and wait for the storm to blow over.