President Obama’s American Jobs Act is asking for Congress to pass $240 billion in additional tax breaks for workers and small businesses to help spur hiring and the economy. But these incentives are only temporary and scheduled to end December 31, 2012. Effective January 1, 2013, employers will find the incentives gone and their profits diminished and employees will find their paychecks smaller.
The Jobs Act also asks Congress to pass $467 billion in tax increases. Those tax increases include reducing or limiting tax breaks for oil and gas companies, increase taxes on the carried interest earned by private equity firms and limiting or eliminating tax deductions for individuals making $200,000 or more per year or couples making $250,000 per year.
Unlike the temporary status of the benefits of the American Jobs Act, the tax increases are set to permanently go into effect on the same day the incentives disappear. So not only will employers find their profits diminish with the loss of the incentives, but they will also experience a further decrease in profits when the new tax increases go into effect.
Many economists have predicted that unless there is a drastic recovery in the economy, which is most unlikely, that 2013 could see another round of massive layoffs due to Obama’s American Jobs Act as employers once again have to start trimming staff to keep their businesses afloat.
All the American Jobs Act accomplishes is to stave off the recessional jobless rate until a time when Obama can place the blame on the next President which most likely will be a Republican.