July 6, 2012
The nation’s unemployment rate remains at 8.2 percent, while the economy added just 80,000 jobs in June, according to new figures released today. If there can be any upside to this, it’s that our unemployment rate is at least predictable: for the last 41 straight months the unemployment rate has hovered around 8 percent.
When President Obama announced his “stimulus” recovery plan in 2009, he predicted that by this point unemployment would be down to 5.5 percent. But his recovery plan (comprised almost entirely of government spending) has proven to be a failure. The Heritage Foundation’s Amy Payne explains:
This jobs drought is the result of counterproductive policies, many of which could be reversed immediately. But in the meantime, employers aren’t hiring because they are suffering from prolonged uncertainty, as economists readily admit.
The general sense of uncertainty is compounded by a global miasma. Europe’s economy is floundering and Asia has seen interest rates drop in reaction to slower growth. Much of this can be traced back to Taxmageddon, the massive looming tax hike.
“The largest tax increase in U.S. history—$494 billion in one year—will hit on [Jan. 1], as a host of tax cuts expire and new tax hikes (including some of Obamacare’s new taxes) take effect,” she explains.
Even though Taxmageddon has not hit yet, apprehension and uncertainty about it is starting to devastate to job creation. Taxes are among the biggest challenges facing small business owners, and if they expect a higher tax bill, that means less money to hire workers. Furthermore, they are unable to accurately predict their tax liabilities for 2013, adding to the general sense of uncertainty.
Payne suggests that Congress needs to act now to halt Taxmageddon and get the economy back on track:
The longer Congress waits to prevent Taxmageddon, the more uncertainty there will be for workers and businesses. This is an element of the economy that is actually in the complete control of American policymakers. They should act quickly to increase certainty and stability at a time when the economy greatly needs it. If the President will not lead, Congress should step up and show the public that at least one branch of government cares about creating jobs and growing the economy.
Do you think Congress needs to stop this massive tax hike?