Category | Op Ed

The economic reasoning for the JOBS Act of 2010

Published on February 9, 2010 by Tom Graves

The economy is job one of the legislature and that must begin with getting Georgians back to work. A working Georgia will be the economic beacon and national leader in recovering from this recession.

Some believe that state revenues must increase to stimulate the economy.  Some suggest we stimulate the economy by increasing government spending and regulating businesses to ensure a stable marketplace. Others maintain that raising taxes during tough economic times would bring in revenues needed to maintain a stable government. All these beliefs lead to one overarching philosophy of utopian socialism, an economic system based on equal outcomes, not equal opportunity.  These “solutions” all lead to a government take-over of private businesses and government control over the free-market system.

Do these options sound familiar? We’ve heard these “solutions” presented to us by Atlanta Journal Constitution columnist Jay Bookman and Alan Essig of the Georgia Budget and Policy Institute. To them, I say nonsense, slow down, catch your breath and read the bill. More taxation, litigation and regulation can only have negative effects on our economy. They perpetuate the strangulation of private businesses and further restrict private citizen’s ability to spend and invest their own money.

The greatest stimulus for a robust economy comes from an economic environment that encourages opportunity, productivity and innovation. The hard-working people of Georgia - not big government - are the key to our economic prosperity. If consumers and investors have confidence in the economic environment, then personal spending, investing and job creation will occur. The Jobs,Opportunity, and Business Success Act of 2010 (JOBS Act of 2010) does just that and there is nothing more important for this legislature than to focus on creating jobs and opportunities for our communities.  This legislation is designed to stimulate the state’s economy by providing tax credits, cuts and incentives to create, expand and attract new businesses in Georgia.

Essig would have you believe that balancing budgets, stimulating the economy and bringing in state revenues is a complicated web of mathematics. They throw out large numbers and complicated equations to convince the populace that their way is the only way to recovery.

Let’s keep this simple. State revenues mainly come from two areas - income taxes and sales taxes. If people aren’t working, they aren’t paying taxes and state revenues continue to decline.

My proposal is just as simple - provide private businesses incentives to hire somebody off of unemployment and then reward them with a tax break. This puts Georgians back to work, generating state revenues and increasing personal spending in to the market place.  In addition, increases in unemployment “benefits” are leaches to state revenues. So why not encourage businesses to end their reliance on draining government programs? The quarterly tax credit I’ve proposed will have far less impact on state revenues than the already draining effect of unemployment benefits.

Businesses will receive tax breaks only after creating a job. Once a job is created, then wealth is created. This wealth then results in spending. Spending results in supply demands for goods. And now the supply side theory of economics is in full swing and another job is created. State revenues will grow during this time because somebody is employed. This kind of stimulus is truly a free-market solution that empowers the private sector and will drive Georgia’s economic recovery.

Georgia’s ranking as one of the highest economic outlook states in the nation and having the lowest debt per capita among the 50 states makes our great state very attractive to employers and employees. Add this to the free-market economy solutions of the JOBS Act of 2010 and we will announce to the World that Georgia is open for business.

Representative Tom Graves represents the citizens of House District 12, which includes portions of Bartow, Gordon, and PickensCounties. He was elected into the House of Representatives in 2002, and is currently the Chairman of the 9th District Caucus.  He serves as the Vice-Chairman of the Motor Vehicles Committee and is also a member of the Health & Human Services, Transportation, and Ways & Means Committees.