The April jobs report came out on Friday and, for the second month in a row, job creation badly missed expectations. Economists expected a pessimistic 160,000 jobs created in April. Instead, 115,000 jobs were created. This follows the March jobs report, where only 120,000 jobs were created compared with the expected 200,000 jobs.
Note that many economists consider 200,000 jobs created per month to be the minimum required to keep pace with population growth. Also note that new jobless claims have been elevated over the past month, staying above 365,000 new claims filed weekly and peaking two weeks ago at a revised 395,000 new claims. Note that the dividing line between an economy that is hiring and one that is laying off is considered to be about 400,000 new claims by many economists.
GOP candidate Mitt Romney called the jobs report "terrible" and "disappointing" in an appearance on Fox News.
In that appearance, the candidate also stated that job growth should be around 500,000 new jobs per month. This is not far-fetched, because it is equivalent to the growth seen in the 1984 Reagan recovery, where job creation averaged 350,000 jobs created per month. In fact, in September 1983, 1.1 million jobs were created. The total number of jobs created in the twelve months from September 1983 to August 1984 totaled 4.9 million. In one year, more jobs were created than in Obama's entire term.
This was done, in part, by reforming the tax code. Reagan lowered marginal rates and reduced capital gains taxes, putting more money into the pockets of average Americans, and the economy responded. He made the tax system fairer and flatter for all Americans.
Barack Obama has not learned these lessons from history. Obama and the Democrats in Congress have labored to raise taxes on all Americans by letting the Bush tax cuts expire and imposing punitive taxes on the successful. You see the results of this hostility in the anemic job growth of the last four years.
Mitt Romney, a businessman, knows these lessons. His tax plan was clearly inspired by Reagan's economic policies and the lessons of history. His tax plan will put more money in your pocket and will put more Americans back to work just as Reagan's tax reform did.
Reducing and stabilizing federal spending is essential, but breathing life into the present anemic recovery will also require fixing the nation’s tax code to focus on jobs and growth. To repair the nation’s tax code, marginal rates must be brought down to stimulate entrepreneurship, job creation, and investment, while still raising the revenue needed to fund a smaller, smarter, simpler government. The principle of fairness must be preserved in federal tax and spending policy.
America’s individual tax code applies relatively high marginal tax rates on a narrow tax base. Those high rates discourage work and entrepreneurship, as well as savings and investment. With 54 percent of private sector workers employed outside of corporations, individual rates also define the incentives for job-creating businesses. Lower marginal tax rates secure for all Americans the economic gains from tax reform.
•Make permanent, across-the-board 20 percent cut in marginal rates
•Maintain current tax rates on interest, dividends, and capital gains
•Eliminate taxes for taxpayers with AGI below $200,000 on interest, dividends, and capital gains
•Eliminate the Death Tax
•Repeal the Alternative Minimum Tax (AMT)
The U.S. economy’s 35 percent corporate tax rate is among the highest in the industrial world, reducing the ability of our nation’s businesses to compete in the global economy and to invest and create jobs at home. By limiting investment and growth, the high rate of corporate tax also hurts U.S. wages.
•Cut the corporate rate to 25 percent
•Strengthen and make permanent the R&D tax credit
•Switch to a territorial tax system
•Repeal the corporate Alternative Minimum Tax (AMT)