econ. question

[Jørn Andersen]

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
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