This blog entry is courtesy of a new contributor named Public Sector Pete. I was very surprised to receive it from him, but I enjoyed reading it, so I decided to post it. PSP–not to be confused with Sony’s Playstation Portable–discusses Iowa, tax cuts and business. Thanks, Public Sector Pete!
There’s some bad mama jama goin’ down in Iowa.
This report from Iowa’s chief political officer effectively explains how Governor Terry Branstad’s new corporate tax plan primarily affects the 885 largest companies in the state.
First, I want to take a closer look at the smaller companies. The tax savings for each of these companies is in no way sufficient to hire even one additional full-time employee. Average yearly savings are estimated to be approximately $6,000 or possibly much less given other constraints. This directly means the vast majority of the 30,000 affected businesses will not be contributing to any job growth stimulation, which was estimated to create 200,000 jobs–as promised.
For the 885 larger corporations, they will see a collective $70 million in savings, which is approximately an average of $80,000 per year. Let’s give them the benefit of the doubt and assume the entire amount is invested in new hires–as you know, there is no type of regulation requiring such altruistic actions from large corporations
Furthermore, let’s assume that absolutely none of these large corporations would use the tax savings to make large corporate campaign contributions since now they would have the opportunity to use their new increased profits to help re-elect their favorite GOP stalwart thanks to this windfall savings.
You could give the corporations a chance and hope that they hire either one new higher paid worker or two medium paid workers with benefits or possibly five minimum wage workers with no benefits.
So that would mean the governor’s proposal to cut about 1,500 state jobs would result in hopes of the possibility that very wealthy men will spend their money under the state’s so-called best interests of hiring 4,000 minimum wagers, leading to a net gain of 2,500 very poor jobs.
As this would be THE BEST CASE SCENARIO AND A REALITY THAT IS NOT GOING TO HAPPEN because the elitist owners and administrators of these large corporations will most likely, as they have done in the past, use laundered public money to further FINANCE THE PERPETUAL POWER OF THE GOP’s UNION BASTARDIZING CAMPAIGN!!! Of course if you were paying close attention, then you would have noticed this is still short of the governor’s declaration of creating 200,000 jobs from about 197,500 existing ones.
Good work, Branstad! If we all had an Economics education like this, we’d all be rich, powerful, and never have to work for a living again.