Obama's $5000 Hire a New Employee Tax Credit: Doesn't Solve the High Coporate Tax Rates that Restrict Employers

At a machinery company in Baltimore, Obama continues handing out money despite a spending freeze. Today, he announced his plans for Stimulus II. While that’s the unofficial title, it’s easy to claim Obama’s plans as a new stimulus based on the speech.

Obama wants to offer every employer a $5000 tax credit for each new employee they hire this year. So with the economy artificially propped up with stimulus money, he is going to artificially prop up employment numbers as well providing money the government doesn’t have to employees whose businesses are still struggling. Since we know the economy was propped up artificially, what are these employers going to do when they agree to give Obama a hand and the private sector of the economy doesn’t start getting better? This looks like a recipe for disaster.

Obama needs to offer these companies real incentives to keep jobs in the United States. Obama needs to start by cutting the corporate tax rate, which is the second highest corporate tax rate in the world. Until he does that, any form of stimulus he produces is dead on arrival.