How to solve 14.5 percent real unemployment? Everyone is wringing their hands over how to improve the jobs picture. President Kennedy addressed the issue in the early ’60s and we can do the same thing now. How? Enact an Investment Tax Credit for small business. The ITC is a dollar for dollar tax credit, not a deduction, available to all businesses but targeted for small businesses. It should be limited to $25,000.
Here is why it would work. If you own a profitable small business, would you rather send Uncle Sam $25,000 in taxes or spend that money on new equipment that would make your business more efficient and profitable? Duh!
Now imagine 15 or 20 million other small businesses rushing to order new computers, fork lift trucks, pizza ovens, office furniture, phone systems, medical equipment, etc. It would mean millions of businesses getting millions of orders and consequently having to hire people to manufacture, assemble, construct and ship the goods. All of these businesses would hire more people (taxpayers) and pay more in taxes due to increased revenues.
It can be put into place in a matter of days, it’s fair as it treats all businesses the same and does not require the government to pick winners and losers. It is truly shovel-ready, and most importantly it will put people back to work in short order.