Tax Credits Dont Help the Economy by Charles Lane - Essay Example

 Cause and Effect Essay The editorial Targeted Tax Credits don’t Help the Economy by Charles Lane published in the 8 November, 2011 edition of The Washington Post delves on the tendency on the part of the politicians to offer tax breaks to the businesses as an incentive for creating jobs for some specific segments of the community like the veterans. Even, President Obama has included two such provisions in his American Jobs Act to aid the unemployed and disabled veterans.

One of the most important reasons that the politicians across political hues tend to favor such tax credit policies is because they happen to be politically favorable and successful short term populist measures. For instance, President Obama has chosen to highlight his tax credit measures at varied political and social platforms because, it goes well with the national organizations affiliated to the interests of the veterans and it makes him come out as really being veteran friendly. A large number of the Republicans are more than willing to support this proposal because they also want to be seen in a positive light by the veterans.

As a consequence, supporting tax credits seems to be a recipe for sound politics. Political opportunism is one of the most important reasons that go in the favor of tax credits. However, if one takes into consideration the research, statistics and data garnered by the responsible academic bodies of opinion and the organizations like Labor Department Inspector General, one arrives at the conclusion that tax credits have not been effective at all in creating jobs for the targeted groups and they constitute a political gimmick and an economically unsound way of helping veterans.

The recent tax credit measures will fail to generate results because they will be applicable to all the veterans and not specifically to the post 9/11 related veterans, whom these tax credits intend to help. On impact of such unsound employment policies is that they do more harm than good to the businesses by compensating them for hiring not required and not qualified employees. The direct result of these measures is that they disturb the effectiveness of the small businesses, where the survival is directly dependant on marginal returns.

One other consequence of the tax credit measures is that they are mostly exploited by the big corporations that generate maximum low-wage jobs, which use these credits to earn profits, without investing them for creating new jobs. The other direct result is that businesses tend to see these credits more as subsidies and not as incentives, which dilutes their interest in the targeted communities. So, simply speaking tax credits are impractical and unsound job creation measures which are mostly intended to accrue political gains.

They most of the times fail to create jobs for the targeted communities and threaten small businesses. Besides, they are exploited by the big corporations, which do not use the profits so made to create more jobs. Works Cited Lane, Charles. “Targeted Tax Credits don’t help the Economy”. The Washington Post. 8November 2011. 11 November 2011 .