The ‘Pass This Bill’ Jobs Plan Might Be What the Green Industry Needs
Packers looked good last night — I’m thrilled to have football to watch again. And what an opening act Mr. Obama was. Let’s take a look at components of his American Jobs Act and try to figure out what they could mean to the Green Industry.
Payroll tax holidays. Obama said that by cutting the employee payroll tax in half, the average worker would have an additional $1,500 to spend. Not terribly impressive but what the heck, it’s better than nothing. How much of that $1,500 do you think someone would spend on a lawn care package next spring, or maybe a paver patio? Even if they spend it on something completely unrelated to landscaping, it’s money getting pumped into the economy, and that’s a plus. Remember, two-thirds of the U.S. economy is consumer spending, so the more money we can put into the hands of consumers, the better.
Employers would get some payroll tax perks as well. By also cutting this tax in half, mid-size and larger companies with more than 10-20 employees or more could save tens of thousands of dollars. Companies that add workers and/or provide raises to existing employees wouldn’t pay any payroll taxes at all. Seems like these are some strong incentives to hire if you’ve been teetering on the edge. Of course, hiring requires expansion, and expansion requires confidence that there’s a market and demand for your products or services.
Investment deductions. By extending current tax provisions that allow companies to write off 100% of the cost of a new truck or piece of equipment, etc. in a single year, contractors and dealers are encouraged to make investments. That’s a good thing. Now put your duct tape away and go out and buy a new mower this fall so you’re locked and loaded come next spring!
Housing. A plan to help struggling homeowners refinance could help speed up the housing market recovery. Housing is at the root of many of the problems the Green Industry faces, so this could be a welcomed initiative. However, the housing bubble is what got us into the mess we’re in, and we don’t need a repeat performance. I seem to recall George W. Bush in the 2004 presidential campaign season, often pointing to the record high rate of homeownership in the country as a sign of economic prosperity. We all know what happened just a few years later.
The Act also proposes pumping money into refurbishing vacant, foreclosed homes. That could present some opportunity for lawn and landscape contractors. However, there needs to be a plan for what to do with those homes once they’re refurbished or this will simply be another fleeting endeavor.
Extending unemployment insurance. I’m a compassionate person, and agree that unemployment insurance needs to be extended to victims of the Great Recession. I also understand that much of this money gets pumped back into the economy when the unemployed buy food and gasoline and pay other bills. But I also believe that so long as landscape contractors need people to run mowers and plant trees, and equipment dealers need people to repair equipment, there are jobs available for some of the unemployed.
There’s obviously much, much more to the American Jobs Act, and you’ll likely be hearing plenty about it over the next several weeks.
Feel free to offer your two cents below.
~ Gregg Wartgow, editor in chief
September 10th, 2011 at 2:32 am
Interesting article here. Thank you!
September 13th, 2011 at 9:41 am
The bill does have some good points about it. But,,the cost of the bill is the sticker. The government is broke and this amount of debt is one point. The next is how it is to be paid. Additional taxes. We have enough taxes.
What is needed is less regulation on our business industry, lower taxes, a more friendly business environment promoting business with rules and regulations in our direction, get manufacturing back into the US with tariffs on imports, more competition by promoting small business, and a number of things this Jobs Bill is not going to do for small business.
September 13th, 2011 at 9:47 am
I agree 100%, Glenn. Many of this bill’s elements appear to be “quick fixes” that sound great, but won’t have much of a lasting effect. You can implement all kinds of hiring incentives, etc., but unless the overall economic climate fosters growth in consumer demand for goods and services, we’ll just be inflating bubble after bubble, or simply won’t see much growth at all. Thanks for your comments!
~ Gregg Wartgow, editor in chief
September 20th, 2011 at 2:53 pm
Those are good considerations, but the bill also, by government fiat, obliterates many states rights, states sovereignty issues in regards to employment as I understand it. It seems to put a further squeeze on freedom, but imagine that.
September 20th, 2011 at 6:09 pm
Greg, it has got to be a lot less complicated than this. We have to educate ourselves to the facts of the President’s Jobs Plan, and realize that no matter how it is sugar coated, if implemented, it will further hasten the destruction of America’s economy, and there goes the Landscape business.
We have to stop the j-u-s-t ‘feeling’ sorry for other people; quit giving them crippling and habit forming ‘hand outs’, and start offering those, who are in real need, genuine compassion with an extended ‘hand up’ to help them get back on their feet. Otherwise they will feel humiliated, become ungrateful, lazy, envious, demanding, and even resentful of those who are trying to help them get back on their feet.
Federal spending has grown exponentially over the last decade, leading to overwhelming budget deficits that have and will continue to cripple our economy. To restore America’s fiscal health, the federal government has to reduce taxes, cut wasteful spending, and reform the massive entitlements. Hard decisions are immediatley upon us, and we have to be the leaders who contact our present representatives and help elect the future representatives who will make the tough decisions in these areas and not put up with the killer $1.5 Trillion in New Taxes that this plan imposes without any significant cut in spending.
Two years ago, as the United States was coming out of the last recession, one of America’s great orators was asked how raising taxes on anyone would help with the economy. His answer? “Normally you don’t raise taxes in a recession, which is why we haven’t, and why we’ve instead cut taxes.” Fast forward to today, as America is struggling with zero job growth and a stagnant economy, and this same orator has dramatically changed his rhetoric, proposing $1.5 trillion in new taxes on the American people and the country’s job creators. Yes, President Obama is this orator and wittingly or unwittinly the Job Destroyer!
As the Heritage Foundation puts it, “Clearly These massive tax increases come as part of the President’s plan to reduce the nation’s out-of-control debt, but rather than address the underlying spending problem, it will further deepen America’s economic quagmire and only serves to stall the real reform American needs in order to get on a path of fiscal sanity, as Heritage’s Alison Fraser explains:
Obama is demanding a ‘balanced’ approach as though somehow hiking taxes is both fair and necessary. But this notion that he is pushing — half tax hikes and half spending cuts — is beyond the class warfare message it sends. It is a tactic. A tactic to stall the real reforms that our leaders in Washington must undertake now in order to avert a fiscal, economic and moral crisis.
‘Real’ reform is necessary because of the depth and scope of America’s spending nightmare. “The federal government today is claiming roughly one-fourth of total economic output — about 25 percent of gross domestic product,” Heritage’s Patrick Knudsen writes. That’s a post-World War II record, and it’s a huge drag on the economy since all that spending is paid for by taxes and borrowing, which reduce the amount available for investment in the private economy. And down the road, the outlook isn’t good: Social Security is growing at a rate of 5.8 percent per year, Medicare at 6.3 percent, and Medicaid at 9 percent. Unless those programs are fundamentally reformed, their costs will keep going up, and taxes will have to keep being increased to pay for them.
Disappointingly, the President yesterday retreated from his previous overtures to entitlement reform and took Social Security reform off the table while proposing minor cuts to Medicare and Medicaid–rather than the reform that would make a significant difference for the country. Obama’s plan is bad news for our nation’s defense as well, posing even more radical cuts for an already under-funded military.
Setting aside for a moment the fact that the President’s plan ignores America’s core spending problems, his plan to drastically raise taxes is coming at a time when the country can least afford it. How will the latest Obama tax increase play out? Heritage’s Curtis Dubay explains:
The new revenue would come from allowing the Bush tax cuts to expire for families and small businesses earning more than $250,000 a year, limiting their deductions, and the President’s new “Buffett Rule” that would further raise these job creators’ taxes in some way which the President has not defined. He also wants to eliminate deductions, credits, and exemptions. This is a war the President is waging on success–as if so-called fat cats were the root of our spending problems.
The President has set his sights on the wealthy despite the fact that the top 10 percent of earners in America already pay about 70 percent of federal income taxes. And taxing America’s job creators will only serve to reduce productivity, slow economic growth, depress wages and salaries, and decrease household wealth. To use the President’s own words, raising taxes in bad economic times would “take more demand out of the economy and put businesses in a further hole.” Where is that President Obama today?
Raising taxes will not fix our budget and debt crisis. But it can be solved by transforming our entitlement programs, rolling back wasteful and inefficient spending, protecting the nation, and overhauling our punitive, inefficient and noncompetitive tax code, as laid out in Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending and Restore Prosperity.
America is facing an unemployment crisis, a debt crisis, a spending crisis, and an entitlement crisis. Instead of making things better, President Obama wants to make matters worse by icing that nightmarish cake with massive tax increases. Two years ago, President Obama emphatically renounced raising taxes in a recession. Now, with the 2012 election looming, he has changed his tune and is taking aim at America’s job creators in a game of class warfare designed to play to his liberal base. Job creation has fallen by the wayside.”
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