House Speaker John Boehner, R-Ohio, added his two cents to the pot of job creation plans today when he called for a total reform of the tax code, fewer federal regulations and an expansion of infrastructure projects and domestic energy production.
Boehner’s proposals almost directly mirror the agenda put forth in early September by House Majority Leader Eric Cantor, R-Va., and even include a few similarities with President Obama’s American Jobs Act.
But while the president’s plan focuses partially on the employee side of the equation, with payroll tax breaks and extended unemployment insurance, Boehner’s plan targets the employer side by lowering the corporate tax rate and rolling back environmental and labor regulations.
“My worry is that for American job creators, all the uncertainty is turning to fear that this toxic environment for job creation is a permanent state,” Boehner said Thursday in a speech to the Economic Club of D.C. ”Job creators in America are essentially on strike.”
One way Boehner proposed to inspire those jobs creators to hire more workers was to decrease the corporate tax rate and simplify the tax code so companies have more money to invest.
Boehner called on the debt super committee, which is tasked with finding $1.5 trillion in spending cuts before Nov. 23, to get the ball rolling on a complete overhaul of the tax system that includes closing loopholes and lowering rates for both individuals and corporations.
But while there is almost universal agreement that the tax code is too complex, economists are at odds over whether lowering businesses’ tax burden will actually result in them hiring more people.
“What guarantees that that money goes into hiring?” asked Brad Kemp, the director of regional research at Beacon Economics. “What’s to say they won’t invest in manufacturing equipment or something else? Lowering taxes does not guarantee we’re going to get more jobs.”
But William McBride, an economist at the Tax Foundation, said dropping the corporate tax rate 10 percentage points, as GOP presidential candidate Mitt Romney suggested, would create as many as 1 million jobs in a year.
“The corporate tax rate is generally considered to be the most harmful of taxes in terms of economic growth … there is a lot of bipartisan agreement about this,” McBride told ABC News shortly after Romney introduced his plan.
Both Boehner and Cantor, the No. 2 Republican in the House, proposed a roll-back of federal regulations, many of which come from the Environmental Protection Agency.
The EPA’s proposed Clean Air Act rules are almost universally hated by Republicans. Besides Boehner and Cantor, all three of the GOP presidential candidates who have laid out a jobs agenda — Romney, Jon Huntsman and Newt Gingrich — called for the EPA regulations to be repealed.
Boehner, in particular, called for speedy passage of a bill that requires Congress to sign off on any new regulations — which are created and implemented in the executive branch — that could have a “major impact” on the economy.
Shortly after Cantor announced his plan, which targeted seven such regulations from the EPA, Obama announced he would stop the implementation of the most costly rule, which would have capped ozone emissions. The new policy carried an estimated $25 billion annual price tag.
In a similar show of bipartisan agreement, Boehner said he was “not opposed to responsible spending” on infrastructure projects, so long as they are coupled with expanding domestic energy production.
Obama’s jobs act includes $100 billion worth of transportation and other infrastructure projects that he said will help put to work the “more than 1 million unemployed construction workers ready to get dirty right now.”
“Infrastructure investment is the best thing he can do, period,” Kemp said. “By creating a better electric grid, expanding roadways and expanding transportation infrastructure, you are ultimately allowing for businesses to grow.”
Besides directly spending money to rebuild America’s bridges, Kemp said the best way politicians can spur job growth is to abandon the brinkmanship that has dominated Washington since the debt ceiling debate.
“Businesses are not investing because they are saying, ‘I don’t know what’s going to happen because I don’t have a clear view from my government,’” Kemp said. “If you want to blame somebody, blame the dissention between the parties.”