Private Sector Job Creation Must beTied to Socially Responsible Corporate Behavior

Up until now, lawmakers at both the Federal and State level want to simply hand corporations and smaller businesses more money and hope they create jobs somehow. With individuals it is the same. The Bush Tax Cuts continue for the top two percent of income earners with no legal requirement that they do anything whatsoever with the money.

Since 2001, that has led to the pocketing of much of that money by the rich, business decisions that allocate the new cash to overseas business expansion and job creation rather than doing so in the United States.

Many corporations based in the United States show net losses of jobs here during the Bush Years and under the Bush tax cuts for “Job Creators.” In the midst of our present economic depression, thousands of jobs are either cut out or simply moved overseas by Fortune 500 corporation after Fortune 500 corporation.

Democrats and progressives of the American left like direct, concrete, transparency in job creation. The government spends a large sum of money for a public purpose and bids contracts with private sector firms who in turn hire more people to do the new work required in the contracts.

Republicans by contrast want to cut taxes as an incentive for business to create jobs and spur economic growth. But as we’ve seen, their efforts do not require businesses and individuals to use the largesse of government tax policy in order to create jobs and relieve unemployment. Here the job creation schemes are indirect, highly lacking in transparency, not concrete at all, and with predictable results: results we’ve seen since 2008 most dramatically.

Struggles for Justice, a liberal-left progressive blog will now perform a feat of great daring: we will actually advocate for the zeroing out of corporate taxation. Jaws dropped all over cyber-space just now.

But before you conservatives, and Tea Party Republicans start cheering there is one important modification to this continuously touted Republican idea.

The elimination of corporate taxes altogether would carry with it legal and financial penalties for businesses however large or small that do not create jobs that pay well above the poverty line on a long-term basis and where growth in the firms paying zero corporate taxes fails to occur in each fiscal tax year.

Corporate entities that create good jobs in a tax year and open new manufacturing facilities, expand existing ones or expand facilities for the delivery of real services do not pay any taxes to the government at all. But those that pocket the money, give it entirely to investors as dividends, fail to create jobs, and do not push economic growth should find that tax loopholes have been closed and the standard corporate tax rates in place apply fully. Firms that take jobs overseas pay penalties for doing that. Those firms experiencing financial hardship might on some basis be excused for the standard rates for a year at a time.

Private individuals would pay in to a highly progressive income tax system where no one can evade their social responsiblity to pay their fair share of taxes and rates are based on the ability to pay. But the tax rates could be moderate, predictable, and far from confiscatory.

The sharp incentive here becomes an economic imperative for private sector business to act in socially responsible ways. They would have to pay attention to adding jobs whenever possible right here in the United States. They would have to be largely full-time jobs and pay so that a family of four would be above the poverty line set presently by the Federal government.

Only when the economy is overheated in some kind of inflationary excess with growth that is dangerously too rapid, would the penalty for not hiring be removed. This would also apply to a situation where something like full employment already exists and there simply aren’t the people with the skills to hire as it is: the complete reverse of where we are today.

The United States is not going to compete with the lowest labor costs to be found in our world and still remain America with any kind of surviving American dream. We have to have outcome-based tax policies.There must be incentives for firms that innovate with technology, better train their workforces, in order to compete both in the U.S. market and overseas.

And that means trade policies that are not fair to U.S. based business or workers must be changed to protect that industry and those workers just enough so they can compete and no more.

Democrats and Republicans, liberals and conservatives, progressives and Tea Party members could all agree on such a policy. It works for both divergent political philosophies. Government plays a role in setting out the incentive for socially responsible corporate behavior, but it is the private sector that retains most of its autonomy and acts without government direction to simply do the right thing.

The great trouble with Republicans and Tea Party ideas for economic growth is that the tax cuts for corporations and individuals are always there but there are no incentives for either corporations to act in the public interest in a socially responsible manner, or for individuals to do so. The result is cash flowing continually upward, the middle class getting hammered and to no real positive result.

We must move toward an environment where government does the prodding and business itself behaves in a socially responsible manner. What about a tax incentive for business to permit a union shop to exist in the workplace and for a union representative on the corporate board of directors?

Republican and Tea Party presidential candidates seeking to re-direct economic policy in this country have to abandon the same tired old policy of simply further enriching the rich at the expense of everyone else. Democrats could reach out and suggest cooperation if there are strong incentives for business to actually create real jobs right here in America. Without that outcome based and socially responsible approach there is nothing to recommend in what Republicans have to offer.

Democrats at least understand that people must be able to see concrete connections between policies that give money to people who already have much too much of it and job creation.

When will all Americans insist that the private sector and government show us real transparency in job creation strategies. Talk, proposals, indirectly providing resources without any strings on businesses that have behaved in a socially irresponsible manner for years borders on the absurd.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s