"The Get America Working! approach would work, in effect, by correcting a major price distortion. The current U.S. Internal Revenue Code taxes employment far more heavily than it does the use of natural resources. This distortion has grown progressively worse as payroll taxes have grown. Revising this distortion would increase employment, equity and overall economic vigor importantly. And it would do so by responding to market price signals, not through clumsy and expensive government interventions."
Has Europe got the answer?
Date:
Wed, 11/04/2009
Source:
The Economist
"Not entirely, But America could still learn from some of the continents ideas for tackling unemployment." says The Economist. The article describes Euopean Union governments' actions to deal with job loss concluding, "... Europe’s governments are right to focus on waiving or reducing their high payroll taxes, especially for additional hires. And it is why American proposals to finance an extension of unemployment insurance with payroll taxes are misguided. Heavy labour taxes are one reason why Europe entered the downturn with far higher unemployment than America. Lightening that burden would do most to boost jobs—on both sides of the Atlantic."
