Thursday, December 9, 2010

Tax Cuts and the Impact (i.e. Cost) per Job

American Progress details:

Our analysis of the framework tax agreement that President Barack Obama announced yesterday, including additional tax cuts and an extension of unemployment insurance, finds that 2.2 million jobs will be the end result. In this time of economic distress, millions of new jobs are, of course, very welcome. It is, however, unfortunate that these jobs have to come from an agreement that is a balance between large, unneeded, bonus tax breaks for the wealthiest Americans and the needed continuation of unemployment benefits, middle-class tax relief, and additional help for the economy for the rest of us.
Based on their analysis the "good" components are the unemployment benefits extension, payroll tax cuts, and refundable low income credits forecasted to cost $150k or less per job added; while the bonus tax credit, extension of business tax credits that were set to expire, and bonus expensing provisions (100% for 1 year, 50% for year 2) cost between $400k and $700k per job added.

Source: CBO / Mark Zandi

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