January 29, 2010
Idiotic Idea of the Day
The Refugee has decided to nominate a new category for daily award: Idiotic Idea of the Day (IIOTD). Trust him, this is going to be big.
Today, Barack Obama announced that a $5000 credit would be given to small business for each "net new" job created in 2010. Which really goes to show how little the preznit (credit to Keith) understands about running a business.
So, I'm a small businessman (and The Refugee has been one): Am I really going to hire someone at $60,000 (or pick a number) this year and every year thereafter just to get a $5,000 tax credit? Heck no. I would hire said person based on the economic business justification and a $5,000 subsidy would not even be a tipping point. However, I would gladly take the credit anyway thankyouverymuch.
So, how many jobs will this credit create that would not have been created without it? Zero. How much will it add to the deficit? About $33 billion. IIOTD.
Economics and Markets Posted by Boulder Refugee at January 29, 2010 3:57 PM
By remarkable coincidence, my wife and I were at a business meeting during the Wednesday speech - we'd just filed incorporation papers for a small business. We'll be creating (not "creating or saving") ten jobs. We're actually DOING something to stimulate the economy. Didn't even know about the $5,000 credit - but whatever part of that is left over after the offsetting tax increases and health coverage increased will be donated to the campaign funds of business-oriented, free-market candidates for office.
On the other hand: opening an escrow company in California's depressed real estate market? I may be guilty of the next Idiotic Idea Of The Day.
Posted by: Keith Arnold at January 29, 2010 5:59 PMWhere will you get enough ideas to populate this new feature, br? Is it sustainable?
Posted by: jk at January 29, 2010 6:14 PMOK, KA (like the moniker?), here's the dirty little secret: you have to have enough taxes due to cover the tax credit. In other words, if you lose money or break even, like most start-ups do for the first few years, you have no taxes payable and therefore nothing to offset the credit.
BTW, got any openings? I might as well be the first to apply!
Posted by: Boulder Refugee at January 29, 2010 6:26 PMNevertheless, I'm sure the preznit will happily take credit for creating those jobs! What a guy...
Posted by: Boulder Refugee at January 29, 2010 6:28 PMMaybe I ought to tell the Preznit I'm creating these jobs in spite of him, not because of him.
Nuance.
Posted by: Keith Arnold at January 29, 2010 6:46 PM | What do you think? [5]