While we all know that private companies create the vast bulk
of jobs, public policy can influence how many there are. Over the past year, people have proposed four
changes which may, or may not, help us have more of them. Would they be effective?
Ann Tergesen and Richard Ruben, in the October 21 MarketWatch, told us that “There’s talk
of capping 401(k) contributions at $2,400 per year.” A bad idea.
Saving is good, and we should be using tax policy to promote positive things,
not discourage them. As well, $2,400 is
a tiny amount. An annual limit of, say,
$10,000, could be reasonable if members of the House Ways and Means Committee
truly wanted to “generate revenue to support broad reductions in individual tax
rates,” but not less.
There were times when the headline “US employers desperately
need workers. Let’s help millions of
adults stuck on food stamps move into jobs” (Sam Adolphsen, FoxNews.com, January 3rd)
would have been appropriate, but now is not, on multiple counts. First, we are over 16 million jobs short, and
if companies were more willing to raise pay and provide training, they would
have all the workers they need. Second,
given that, enough jobs aren’t out there for people wanting to be paid market
rates to “move into.” Third, not
providing enough to eat for citizens of this agriculturally bountiful country
is not the way to “help” them. True,
there are some who would just like to survive with minimum effort, but when
surveys consistently show how many would prefer to fully support themselves,
they are clearly a small minority. This
is 2018, not 1950.
The August 11th Economist discussed a better proposition, land-value taxes, in “On
firmer ground.” What the unbilled authors
called “an enticing prospect to those harmed by high land values today” would
be especially effective, as while “typically, taxing a good lowers supply and
raises prices,” that could cut back land development but not its physical quantity. A chart with the article showed remarkably
little correlation between house replacement costs and their values, with
average dwellings in Pittsburgh and Houston worth little more than their
rebuilding amounts, but those in San Francisco and San Jose, while half again
the replacement cost, worth, due to their land, three and four times that
amount. The idea of owning land itself
is only a societal invention, the authors point out, not allowed in the high
seas and not the same as having possession of things people have created or
bought from those who did. Land-value
taxes are, indeed, worthy of consideration.
With income an increasingly unrepresentative source of
government revenue, we need to consider others.
That is the thesis of “Stuck in the past,” also in the August 11th
Economist. This piece also mentioned “expensive housing,
often the result of a shortage of land,” which “has yielded windfall gains to
homeowners in big, global cities,” and called for, “to stop companies shifting
profits,” governments to “switch their focus from firms to investors,” with
corporate taxes only as “a backstop, to ensure that investors who do not pay
taxes themselves, such as foreigners and universities, still make some
contribution.” We do need to look at an
overall tax-system makeover, and implement others, such as on financial
transactions, as existing revenue sources, such as income taxes, shrink. The World War II of implementing that,
though, would make partisan Supreme Court nomination battles look like
skirmishes. Likely? No.
Impossible? Not quite. Necessary, within the next 20 years? Yes.