A majority of Americans think President Obama's jobs plan won't help lower the 9.1% U.S. unemployment rate: 51% say it won't work, while just 40% think it will create enough jobs to lower the jobless rate, according to a recent Bloomberg News poll.
Jeffrey Miron, director of undergraduate studies in the department of economics at Harvard University and senior fellow at the Cato Institute agrees with the majority for several reasons.
The first part of "The American Jobs Act" focuses on helping small businesses though tax cuts.
Specific ideas, according to the White House, include:
• Cutting the payroll tax in half for 98 percent of businesses: The President's plan will cut in half the taxes paid by businesses on their first $5 million in payroll, targeting the benefit to the 98 percent of firms that have payroll below this threshold.
• A complete payroll tax holiday for added workers or increased wages: The President's plan will completely eliminate payroll taxes for firms that increase their payroll by adding new workers or increasing the wages of their current worker (the benefit is capped at the first $50 million in payroll increases).
• Extending 100% expensing into 2012: This continues an effective incentive for new investment.
• Reforms and regulatory reductions to help entrepreneurs and small businesses access capital.
While not opposed to the premise, Miron is not convinced these actions, if passed by Congress, will move the needle. "I just don't think it's going to be very significant," he tells The Daily Ticker's Aaron Task in the accompanying clip. "I don't think that's what's keeping businesses from hiring."
A better solution would be to lower corporate taxes, according to Miron. "Reducing the corporate income tax is the most obvious and probably the most effective."
Another main tenet of Obama's plan is to increase infrastructure spending:
• Modernizing at least 35,000 public schools across the country, supporting new science labs, Internet-ready classrooms and renovations at schools across the country, in rural and urban areas.
• Immediate investments in infrastructure and a bipartisan National Infrastructure Bank, modernizing our roads, rail, airports and waterways while putting hundreds of thousands of workers back on the job.
This is where Miron really has a bone to pick with Obama's plan. "Overall, the amount of spending on those things (infrastructure) is probably too high, not too low," he says. "There's a ton of wasteful infrastructure spending," he goes on to say. "There are bridges to nowhere, there are big dig projects in Boston, there are subways systems built in lots of city where there wasn't nearly the population density to support them."
All these critiques pale in comparison to what he believes is the root of the jobs problem - an anti-business sentiment pervading the White House.
"The anti-business atmosphere in the United States - the dislike of capitalism, the soak the rich attitude that a lot of Democrats seem to be embracing these days; that is the major impediment to businesses wanting to do more investment, do more hiring," Miron declares.