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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Job Tax Credit As Second Stimulus

This item by Ed Kilgore was first published on October 21, 2009.
As the economy continues to struggle, it´s increasingly obvious that some sort of federal job tax credit may be the only ´´second stimulus package´´ that could gain traction in Congress.
The idea has long attracted conservative support, but lately progressives, including former Labor Secretary Robert Reich and the Economic Policy Institute, have been out in front. It´s popular among some Democrats and economists in part because its costs are dependent on its success (unlike across-the-board tax cuts), and in part because it´s viewed as a way to counteract offshoring of jobs.
EPI has a new job tax credit proposal out, and it´s very focused on designing a credit that is large enough to have an immediate impact, temporary enough to keep its cost relatively low, and efficient enough to avoid corporate freeloading.
If there´s another idea that can serve as the centerpiece of a follow-up to the stimulus legislation, I don´t know what it would be. Waiting for a cyclical economic recovery seems irresponsible, and certainly dangerous to the party controlling the White House and Congress.

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