It’s unclear who President Barack Obama is listening to lately— some days, it’s as if he’s deaf to the real concerns of the country. Putting off his “jobs speech” until after Labor Day — in favor of a vacation in Martha’s Vineyard — was a political misstep that will likely haunt him in 2012.
But there’s one voice he should listen to — a man who can take some responsibility for the tremendous job creation numbers in Texas, Workforce Commission Chairman Tom Pauken.
“National unemployment remains stubbornly high, with the latest figures for July showing 9.1 percent unemployment,” Pauken says. “Even Texas — which has done better than any other state in the nation in adding private sector jobs over the past decade — saw its unemployment rate increase to 8.4 percent in July. If present trends continue, our nation will continue to suffer from ‘structural unemployment’ and the hollowing out of our manufacturing base.”
It’s unclear — still — what will be in Obama’s speech and his jobs proposal. But his history has been to propose those “shovel-ready” public works programs, which have always shown to be overrated, far too costly (the Congressional Budget Office says each public works construction job costs more than $100,000), and rarely truly “shovel-ready.”
“That is why it is crucial that we focus on job creation in our private sector in order to get people back to work,” Pauken says. “Yet, two and half years into his presidency, Barack Obama has yet to unveil a substantive proposal to encourage private sector job creation. Instead, since the Obama ‘stimulus’ program began in February 2009, we have lost another 1.6 million jobs.”That’s why the focus must be on freeing the private sector to create jobs.
“The best way to do that is to replace our onerous corporate tax system with one that rewards capital investment and employment in the United States,” Pauken contends.He explains the “stealth tax” American corporations pay — an issue the Obama administration could tackle.
“As free trade agreements began governing international transactions in the middle of the 20th century, nations were to drop tariffs that protected their own industries,” he explains. “Though many of the explicit tariffs that existed were indeed eliminated, nations soon discovered they could circumvent these rules with ‘stealth tariffs.’ Starting with France in the mid-1960s, European countries began adopting border-adjusted value-added taxes (VATs) that now average nearly 21 percent. As a result, U.S. goods carry the full burden of federal, state, and local taxes, plus an added VAT tax when they are shipped to foreign markets.”
The result is a system that put American manufacturers at a disadvantage.
His solution?“To foster private sector growth and level the playing field with our trading competitors, the U.S. must adopt its own border-adjusted consumption tax, which could replace our current corporate tax system (including the employer portion of the payroll tax) and generate just as much in revenue for the government,” he says. “It’s time for courageous action and genuine reform. If we fail to do so, we will continue to set records for long-term unemployment.”
Pauken’s proposal makes sense — if anyone is listening.