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1 David S. Logan, Academic Research Suggests That the American Jobs Act Will Produce Few Jobs 1 (2011)

handle is hein.taxfoundation/ffcidxz0001 and id is 1 raw text is: T M September 19, 2011 No. 283 Academic Research Suggests That the American Jobs Act Will Produce Few Jobs By David S. Logan Introduction On September 8, 2011, President Obama proposed the $447 billion American Jobs Act (AJA) to a joint session of Congress. The AJA includes more than $250 billion in tax credits and incentives that are intended to induce more hiring and spur more consumer and business spending. The remainder of the package is dedicated to new spending on infrastructure and make-work projects. However, a review of the academic literature on these sorts of tax policies suggests that they will have little, if any, impact on spurring job creation or aggregate demand. Indeed, because these temporary tax measures would be offset by some $460 billion in permanent tax increases, the whole package could actually do much more economic harm than good. Incentive Components The key tax measures in the AJA include:' Three Hiring Incentives: * A 50 percent cut in employer payroll taxes for 98 percent of businesses and a bonus payroll tax cut for new jobs/wages. Expected revenue loss = $65 billion. * A Returning Heroes hiring tax credit for veterans. Expected revenue loss = N/A. (The Congressional Budget Office has not scored this credit yet.) * A $4,000 tax credit to employers for hiring long-term unemployed workers. Expected revenue loss = $8 billion. David S. Logan is an economist at the Tax Foundation. 1 The White House, Fact Sheet: The American Jobs Act. htrp://wwv .whitehotse.gov/the-press-.ofice/201 i i09i08/act-sheet- american-obs-acr.