February 11, 2010
FOR IMMEDIATE RELEASE
Contact: Kim Geveden
Mongiardo Campaign Calls Conway’s "Jobs Plan" Timid
Mongiardo’s campaign spokesman, Kim Geveden said, “The truth is Jack Conway’s so-called ‘jobs plan,’ which largely focuses on targeted small business tax credits, is admirable and will help on the margins; but it is a timid plan. It is not a plan that will jumpstart our economy, create a significant number of jobs or sustain long-term economic growth sufficient to get our growing deficits under control and reduce our nation’s debt.”
“Daniel believes now is the time for bold leadership to put America back to work. It is time to rebuild America. It is time to invest in a stronger America. By developing new coal technologies and reasonable environmental regulations that actually encourages private investment, rebuilding our cracking highways and rusting bridges, repairing our crumbling locks and dams and developing a 21st century public transportation system, we can spur economic growth and create millions of jobs here in Kentucky and across America. More importantly, Daniel’s plan lays the foundation necessary to sustain long-term economic growth, which is the key to reducing our deficits and paying off our nation’s growing mountain of debt,” Geveden said.
There is broad consensus among the business community that targeted tax cuts for businesses that hire unemployed workers will not create many jobs. According to Bill Rys, a spokesman for National Federation of Independent Businesses (NFIB), “There’s certainly nothing wrong with giving a tax break to a business that hired a new worker, especially in these tough times. But in terms of being an incentive to hire a lot of workers, we’re skeptical.”
The reason businesses aren’t hiring new workers is not because they are waiting for a tax credit, it is because consumers aren’t spending, buying their products or services at sufficient levels or frequency to warrant increasing production and hiring new workers. And the reason for that is very simple; with unemployment in double digits and credit tight, consumers can’t afford it, Geveden said.
According to an Associated Press article, “Rick Klahsen, a tax expert at the accounting firm RSM McGladery, said his clients need to see business pick up before they can hire more workers. If demand were increased, they are saying it will take care of itself because then I will have the motivation to go out and hire new employees.”
The centerpiece to Conway’s "jobs plan" is to exempt businesses from paying a 6.2 percent Social Security tax on wages of new, previously unemployed workers.
According to the Associated Press analysis, a company could save a maximum of $3,310 for each unemployed worker it hired after the bill is enacted and paid them a salary of $53,400 for the remainder of the year. The business would get an additional $1,000 on its 2011 tax return if it kept the new worker for at least a full year.
The independent, non-partisan Congressional Budget Office (CBO) concluded that reducing Social Security taxes for businesses that hire unemployed workers would generate only eight to 18 full-time jobs per $1 million in tax breaks. Geveden said Mongiardo’s plan that calls for investing in rebuilding America’s public transportation network would create and sustain an average of 32 to 36 jobs for every million dollars invested – two to four times more jobs than Conway’s plan