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A favorite GOP talking point is that a slew of regulation and taxes are preventing employers from creating jobs, which explains the stubbornly high unemployment rate. “By pursuing a steady repeal of job-destroying regulations, we can help lift the cloud of uncertainty hanging over small and large employers alike, empowering them to hire more workers,” said House Majority Leader Eric Cantor (R-VA). “Business owners are reluctant to create jobs today if they’re going to need to pay more tomorrow to comply with onerous new regulations,” claimed Sen. Susan Collins (R-ME).
But a new study from the San Francisco Federal Reserve finds that this line of thinking is largely bunk:
Figure 3 shows there was almost no correlation between job growth in a state from 2008 to 2011 and the increase in the percentage of businesses citing regulation and taxes as their primary concern. In fact, if anything, the correlation is positive.
States in which businesses increasingly cited regulation and taxes experienced higher job growth, although this correlation is not statistically significant. The lack of correlation is not a matter of the timing we choose. For example, there also is no strong correlation if we examine the 2009–11 period or the 2010–11 period instead.
As this chart shows, there is basically no relationship between businesses citing increased regulations and taxes and higher unemployment rates:
In fact, some studies show that far from killing jobs, regulations help create them and help boost economic growth.
Instead, the San Francisco Fed shows that lack of job creation is tied to a lack of demand — customers don’t have any money to spend, so businesses have no reason to expand. “U.S. counties with high household debt levels coming into the recession are the same counties with depressed levels of employment in the nontradable sector today,” the study said.
heavy taxes upon the 45% that work should encourage them to spend less not more.
heavy taxes on the 55% that dont work will have no effect they dont pay taxes.
heavy taxes upon the 45% that work should encourage them to spend less not more.
heavy taxes on the 55% that dont work will have no effect they dont pay taxes.
heavy taxes upon the 45% that work should encourage them to spend less not more.
heavy taxes on the 55% that dont work will have no effect they dont pay taxes.
Your figures are wrong. It is 46% of people do not pay taxes, but they don't make enough to. If your figure were correct we would have a 45% unemployment rate and we do not have a 45% unemployment rate.
It's true that 46% of people do not pay taxes, but included in that figure are retirees, students, people that are on disability, and people that don't make enough after the standard exemption is applied to pay taxes.
Another BradPiff troll post. He/she will never come back to defend his/her point when challenged. Click on his/her handle to see what I mean.
Why post if you are not willing to engage in debate, Brad? You're barking up the wrong tree; one way communication is the province of NPR, NBC, ABC, NYT, etc.
The reason millons more are unemployed vs pre Great Recession, and the 8 million lost jobs will never return is unrelated to tax rates. Once business saw after the cuts, they have lower costs with equal productivity vs before the cuts, they had no reason to add the costs back.
A favorite GOP talking point is that a slew of regulation and taxes are preventing employers from creating jobs, which explains the stubbornly high unemployment rate. “By pursuing a steady repeal of job-destroying regulations, we can help lift the cloud of uncertainty hanging over small and large employers alike, empowering them to hire more workers,” said House Majority Leader Eric Cantor (R-VA). “Business owners are reluctant to create jobs today if they’re going to need to pay more tomorrow to comply with onerous new regulations,” claimed Sen. Susan Collins (R-ME).
But a new study from the San Francisco Federal Reserve finds that this line of thinking is largely bunk:
Figure 3 shows there was almost no correlation between job growth in a state from 2008 to 2011 and the increase in the percentage of businesses citing regulation and taxes as their primary concern. In fact, if anything, the correlation is positive.
States in which businesses increasingly cited regulation and taxes experienced higher job growth, although this correlation is not statistically significant. The lack of correlation is not a matter of the timing we choose. For example, there also is no strong correlation if we examine the 2009–11 period or the 2010–11 period instead.
As this chart shows, there is basically no relationship between businesses citing increased regulations and taxes and higher unemployment rates:
In fact, some studies show that far from killing jobs, regulations help create them and help boost economic growth.
Instead, the San Francisco Fed shows that lack of job creation is tied to a lack of demand — customers don’t have any money to spend, so businesses have no reason to expand. “U.S. counties with high household debt levels coming into the recession are the same counties with depressed levels of employment in the nontradable sector today,” the study said.
Actually, the study does not confirm anything. It shows a lack of correlation between businesses "citing" things and job creation? That doesn't confirm that there is no relationship between taxes/regulations and job growth. Get real. People complain about all kinds of things all the time. That's complete junk methodology.
Businesses create jobs based on DEMAND--when people are buying their products or services--NOT because taxes are lower. I'm a small business owner. Lower taxes just mean more profit for me, but why would I add employees just because my taxes are lower? If I can use the same number of staff and make more money, good for me. I add employees at the point where I have to--when the number of people I have working can't keep up with the number of people who want to buy from me, so it's time to invest in more employees and grow my business. The increased SALES pay for the new salary and benefits, plus hopefully some profit left over for me. If people don't have the money to buy my goods and services, I make zero, no matter what my tax rate is.
More regulations might lower my profit margin a little because it might cost a little more or take longer for my employees or me to jump through hoops--I have to weigh charging more against what the market will allow--but that's the cost of doing business. As long as I'm still making a profit it doesn't impact my decision to hire. Sometimes things like environmental regs can and do open up new opportunities for businesses because they create demand for new products or services. Again--hiring is based on demand. This isn't rocket science.
It just astounds me that people in "the party of business" don't understand very basic concepts on how you actually run one and make money. Good grief.
Last edited by mb1547; 02-12-2013 at 06:24 AM..
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