econ. question

Jørn Andersen jorn.andersen at vip.cybercity.dk
Sun Jan 12 07:09:19 PST 2003


On 08:42 12-01-2003 -0800, Brian O. Sheppard wrote:


>Has there ever been (or is there) a federal or state policy that ties
>corporate tax breaks to job creation? Say, Company X gets n amount in tax
>breaks for every job created.

In W Europe there are loads of such examples from the whole of the post-WW2 period. Some early examples were/are to promote regional development in weakly developed parts of the countries (and later of the EU). With the world economic crisis in the mid-1970s onwards these kind of schemes took a lot of diverse forms - and in turn created the huge debts which still haunt many WE countries.


>If there is, or has been, such a policy - how has it fared?

One of the examples from Denmark I remember best is from about 1983-84. A left reformist party, the SF (Socialist Peoples Party), succeeded in becoming part of a parliamentary comprise. One of the things they were most proud of was that employers would get a sum (I don't remember exactly if it was tax deduction or or direct subsidy) for each new apprentice job they created.

I was an apprentice then, and some of us followed this very carefully. After the first year or so the employers had been paid for *several thousands* new apprentice jobs. However, the total number of apprentice jobs didn't rise (I can't remember the exact figures, but I remember that even the most positive reading of the figures would indicate any effect whatsoever).

My conclusion is not necessarily that such schemes will never work, but rather that if they are closely linked to tight control by trade unions or other workers' organisations then they just subsidy employers - but without any effect.

Another relevant question, I think, is this: Why should employers be subsided for fulfilling what they in other circumstances claim is their positive contribution to society, i.e. creating jobs etc.? Why not punish those employers who, fx, do *not* create enough apprentice (or other) jobs?

Cheers, Jorn


>Thanks,
>
>Brian
>
>--
>
>"At times one remains faithful to a cause only because its opponents do
>not cease to be insipid." - Friedrich Nietzsche
>
>"Il etait enfin venu, le jour ou je fus un pourceau!" - Comte de
>Lautreamont, Les Chants de Maldoror, 4th Hymn, Strophe 6

-- Jørn Andersen Ærtevej 21, st. th., 2700 Brønshøj Tlf. +45-38816766 Mobil: +45-40300210 E-mail: jorn.andersen at vip.cybercity.dk --------------------



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