My wife sent me this from her work.<br />---------------------------------------------------<br /><br />Don't buy into claims that politicians create jobs <br /><br />JOHN TORINUS <br />8 August 2004<br />The Milwaukee Journal Sentinel<br /><br />Let's agree that business people create jobs, and lose them, not politicians. <br /><br />Sure, the political, legal and education systems support job growth. And business can be stifled with punitive tax and regulatory environments. <br /><br />But job growth revolves more around interest rates, world events, entrepreneurs or where Wal-Mart makes its purchases than around presidential policies. So when our two presidential candidates stump through this pivotal state, put a big discount on how much leverage they have on job growth. <br /><br />That said, business does have a stake in what President Bush and Sen. John Kerry are promising on the stump. So how does it stack up? <br /><br />Free-traders, both <br /><br />On trade, no executive I know is taking rhetoric about more restrictive trade policies seriously. They are assuming that globalization will continue pretty much unabated, and they are positioning their companies to seize the opportunities abroad or cope with the challenges. <br /><br />Bush's political payoff to the U.S. steel industry by raising tariffs backfired. It cost him more votes in steel-using, delegate- critical states such as Wisconsin than he gained. So he backed off. He's essentially a free-trader who thinks American industry can adapt and compete. <br /><br />Despite Kerry's rhetoric about penalties for companies that send work overseas and incentives for those that don't, he is mostly a free-trader, too. <br /><br />The hard truth is that the enormous savings of outsourcing some jobs greatly outweighs any incentives or disincentives that government could mount to slow the trend. <br /><br />Kerry's populist statements about "Benedict Arnold CEOs" who move jobs to other countries was fodder for the Democratic primary. Post- primary, predictably, he has moved toward the center, a la Clinton, and that phrase has disappeared from his speeches. <br /><br />No deficit hawks <br /><br />On the tax front, there are pluses and minuses for business with the two candidates. Kerry is promising a reduction in the corporate tax rate to 33.5% from 35%, but he hasn't been making a big deal about it on the stump. You have to wonder about the depth of his conviction. <br /><br />What he's talking about loudest is raising the taxes on Americans with incomes of more than $200,000 a year. Remember, though, that more than half of small companies are S corporations or limited liability corporations, meaning that higher personal rates on top earners are essentially higher business taxes. <br /><br />Bush wants to make his tax cuts permanent, including those in high-income brackets. That also includes reductions in inheritance taxes that he wants to make permanent. <br /><br />Kerry would pay for a whole variety of goodies with his increase on fat cats. Problem is, it doesn't compute. <br /><br />To illustrate, let's take the City of West Bend, with about 30,000 people. An estimate is that about 50 households have incomes over $200,000. Let's say you raise them five points. That would yield $500,000 in new taxes. Contrast that with Kerry's ambitious social goals. <br /><br />For instance, he wants to cut by half the number of people without health insurance. In Wisconsin, about 8% of the population is uninsured. Half of that percentage of West Bend's population would be 1,200 uncovered people. Average cost in the private sector for medical coverage is about $3,000 per person. So his extended coverage would cost an additional $3.6 million. Obviously, soaking the rich for $500,000 doesn't even dent that bill. <br /><br />About a third of the population at the low end of the earnings scale escapes income taxes already. Reality is that if you want to raise major dough for social programs, it's got to come from the great number of earners in the middle class. Every tax expert knows that, including Kerry's. <br /><br />Yet Kerry proposed additional tax cuts for the middle class. It just doesn't add up. <br /><br />His social platform doesn't work without additional deficit spending -- beyond the record deficits that President Bush has already wreaked on the economy. <br /><br />Neither sounds like a deficit hawk to me. <br /><br />So what to make of this mishmash? <br /><br />Most businesses pay little attention to the campaign rhetoric when making their business plans. They know their destinies have more to do with their own strategies and execution than with anything said on the stump. <br /><br />One Wisconsin executive said he is hoping for gridlock so neither party can advance programs detrimental to the economy. <br /><br />John Torinus is chief executive officer of Serigraph Inc. of West Bend. Contact him at jbt1@serigraph.com.
