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AFL-CIO Chief Thinks More Taxes Will Create Jobs

February 25th, 2011
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04.18.2011 edit/ update

President Barack Obama is introduced by AFL-CIO President Richard Trumka before he spoke about jobs and the economy during an address before the AFL-CIO Executive Council in Washington, Wednesday, Aug. 4, 2010. (AP Photo/Charles Dharapak)

AFL-CIO Chief Thinks More Taxes Will Create Jobs

original article written by Net Advisor

On February 24, 2010 AFL-CIO President, Richard Trumka said that raising taxes on gasoline will create jobs [Source: Yahoo Tech Ticker (PDF print version)]. With oil prices flirting around $100 barrel and likely to climb higher this year, taxing consumers and commercial transportation will only create one thing: inflation.

A higher gas tax impacts everyone. Everything we have in the USA arrived at a store via truck, airplane, and or cargo ship. All of these transportation vehicles use fuel to operate. And if their fuel cost goes up, guess who will absorb those costs? The consumer – in the form of higher food and retail prices. This is called inflation. The last thing American consumers and  business need, especially with a high unemployment rate and where some 41.8 million Americans are receiving food stamps is add a higher gasoline or any other tax.

“The number of Americans receiving food stamps rose to a record 41.8 million in July as the jobless rate hovered near a 27-year high, the government said.”

— Source: Bloomberg, 10-05-2010

Next, Mr. Trumka also seems to be under the impression that, “…every billion spent on infrastructure creates 35,000 jobs…this package would create close to 9 million jobs over the next five years” [Source: Yahoo Tech Ticker (PDF print version)].

Somehow the fantasy ideology by taxing people more will somehow translate into “creating jobs” is the same kind of fiscal planning performed by the Obama Administration over the last 2 years. If one carried this thinking to an end where all you have to do is tax people more and the result would be more jobs, then just tax everyone 100% and utopia would surely arrive, right?

So if tax people more that will create jobs? If that is true, then the $3 Trillion+ that President  Obama allegedly spent on infrastructure, etc, did nothing but increase the unemployment rate and the national debt at the same time.

Unemployment Rate Up 15.38% Under Obama
When President Obama took office in January 2009, the unemployment rate was 7.8% (Source: BLS.gov PDF). And even if you go by the grossly misleading and underestimated government employment data, unemployment is still around 9.00% by January 2011 (Source: BLS.gov Chart). This is a 15.38% increase in the unemployment rate under Obama using the government’s own numbers (Math:  9.0 – 7.8 = 1.2; then 1.2 divided by 7.8 = 15.38).

Unemployment Fuzzy Math
We analyzed and broke down and reported the government’s fuzzy unemployment math (02-17-2010 Report, 03-05-2010 Report, 06-05-2010 Report). CBS 60 Minuets also seems to support our year long argument that the real unemployment rate is far higher than the Obama Administration’s data is willing to admit.  After all, it is an election year, and if Obama and company reported the true unemployment rate, that might hurt his re-election bid. The President promised transparency to his government, apparently with the unspoken exception for things that don’t make the Administration look good, and the back-room closed door sessions that decided what kind of health care America is going to have in the future.

Transaction Tax
As if higher taxes were not enough, Mr. Trumka also wants to create a transaction tax on financial institutions for each transaction they make. The amount would be less than a penny, but don’t get swindled here. A penny in taxes does not mean 1 cent, it usually means one percent. And that adds up to a lot more than a penny. As if sales taxes were not already high in many states such as Tennessee, California, Arizona and many others how would you like to kick up another 1% on top of everything you buy. This is nothing more than an initiative to a national sales tax. Once government implements new tax polices, taxes only go where? “Up,” is the correct answer.

Mr. Trumka suggested that “(government)…could raise another $100 billion in revenue without taking money out of the pockets of the middle class” [Source: Yahoo Tech Ticker (PDF print version)]. Any transaction accessed on purchases would impact everyone who buys anything. If the transactions are leveled against banks only, then the banks will simply pass on the tax to merchants in the form of higher transaction fees. Merchants who will suddenly see their revenues decrease from higher taxes, will then in turn pass on these higher operating costs to consumers in the form of higher food and retail purchases, or cut jobs to off set the higher imposed costs.

Union Appointments Under Clinton and Obama
Under the Clinton Administration (1993), Mr. Trumka was appointed to the Bipartisan Commission on Entitlement and Tax Reform, where taxes went higher during Clinton’s tenure, and government entitlement’s have increased the national debt.

In 2009, President Obama named Mr. Trumka to his White House Economic Recovery Advisory Board. Apparently that effort didn’t work out too well, because in 2011 President Obama created another similar committee again naming Mr. Trumka among others to Obama’s Council on Jobs and Competitiveness.

Reforming Government and Creating Jobs
If the Obama Administration is looking for the USA to be competitive and job creating, here are some suggestions:

(1) Start reforming state employees unions whose pensions and low cost to free health care are busting states financially across the nation, and put such entitlements in-line with the private sector.

(2) Lower taxes on business and consumers and cut bureaucratic red tape so business can compete with international counterparts.

(3) Mandate government to spend within its means, reform entitlements, control eternal social welfare programs and create a plan to pay down the national debt. If government could get its spending under control, that alone would help boost the economy. As of now, the Obama plan is on track to put the U.S.A. in a worse economic situation down the road instead of truly fixing it now.

Richard Trumka’s Salary & Union Management
Mr. Trumka probably doesn’t have to worry too much about his higher tax policy ideas or inflation. Mr. Trumka’s salary in 2009 as head of the AFL-CIO was reported at $238,975. At the same time, the union’s assets have dropped from $66 million in the black to $2.3 million in the red by June 30, 2008 (Source: Laboreducator.org).

These ill conceived policy ideas of raising fuel taxes and fees on institutions has not, nor will not create jobs. The more burden government places on business will only further cut U.S. jobs and move them to lesser burden countries overseas such as in China, and India. And more taxes placed on citizens will only take away their spending ability to drive the economy and job growth.


image copyright AP. Video courtesy of Yahoo, Inc.

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