A Sensible Proposal In the Indiana General Assembly?

Astonishing as it seems, news occasionally emerges of rational proposals at the Indiana Statehouse.

The Indianapolis Business Journal recently reported on one:

An Indiana Senate Republican wants to reward businesses with tax credits when they raise pay for their minimum-wage workers.

State Sen. John Ruckelshaus of Indianapolis has introduced a bill that would provide a credit against state tax liability for employers of minimum-wage workers that give raises to their workers after those workers complete a training program that would improve their education level or skills.

Since being elected to the General Assembly, Ruckelshaus has reminded me of the highly principled Ruckelshauses I used to know. (I believe they were his father and uncle.) They were the kind of Republicans I routinely encountered before the party devolved into today’s iteration–a cross between a cult and a comedy writer’s Mafia. (Senator Ruckelshaus is also sponsoring one of this session’s anti-gerrymandering measures, so kudos to him.)

Ruckelshaus said Senate Bill 15 is designed to incentivize businesses to help their minimum-wage workers move up the economic ladder.

“They’re trapped because they don’t have the skills to move up the ladder,” Ruckelshaus said. “The whole concept is it’s a two-way street between the employer and employee. It’s a tax credit to employers. For the worker that receives an increase in pay, they’re able to raise their skills up and be more attractive in the workforce, and be able to make more than a minimum wage.”

Aside from being good policy, this sort of approach inadvertently illustrates what is wrong with the “trickle down” economic theory that Congressional Republicans always trot out to justify their persistent work on behalf of the already-rich–a theory they repeatedly recited when defending the obvious inequities of their recent tax “reform” bill.

How often have we heard that recitation?  If we just give tax breaks to the wealthy (no strings attached)–that money will be used to invest in businesses that will hire workers. Those tax giveaways to the “makers” are necessary in order to create jobs!

I have frequently asked what seems like a reasonable question: if these tax cuts and loopholes so favorable to the wealthy are really intended to create jobs, why aren’t they targeted to that result, in much the same way as Ruckelshaus has proposed; that is, why not limit proposed incentives to employers who can demonstrate that they have provided the intended benefit? It would seem simple enough to attach some “accountability strings” that would base federal tax incentives on jobs created–to provide that, for every added job an employer could document, she would receive a tax deduction. Or better yet, a tax credit.

I’m confident that most Americans would applaud a tax “cut” that was carefully targeted and constructed to reward actual job creation, rather than the munificent giveaways that are not conditioned upon providing any evidence of public benefit. Research confirms that these no-strings-attached windfalls routinely find their way into shareholder dividends and management bonuses rather than job creation or workers’ pay.

Kudos to State Senator Ruckelshaus. May his tribe–and his approach–increase.

22 thoughts on “A Sensible Proposal In the Indiana General Assembly?

  1. there was once a time when you could save money,make a living wage,and have a decent living. 1946/1981..though the incentives here display a “try” at reversing the hole people of any economic status live in today,its a bandage of good faith. if we missed the mark, maybe some history is needed over bandages. we the people have been conned into believing bandages and good failth work. since reagans war on the working class, its been the same attempt at a bandage. look over your shoulder,and look at the wage disparities,and the whole game. its run by wall street,who, have the so called tool,,,money,all of it…unless theres a 20/30% raise in overall wages in one swoop,over the whole working class, you might as well piss more money into laws giving the wall street gang more money.( recent tax scam) if the rise in the market since dear trump isnt a clue,your living under a rock,with your i phone on and ear buds in. though id say this fantastic rise on the market is more manipulation to garner wall street taking the knee for trumps and his congress,its a scam im sure. but even when it came back 9000 point in 7 years of a ressesion(2008/2016), none,i mean none of it went to the people who actully work in this country. it went to investors who theory is,since its our money(now) we deserve this, and the slaves can wittle some wood. a recent article by RJ Eskow about this is a must read, as maybe im not a journalist,nor a man of words, my dignities toward wanton greed is beyond what Mrs Kennedy would allow. Im a working man, period, i made my bed in this class,and be damn if you cant understand,or want to know. if you cant see the problem,and act on it, then live by your means and pass that down to you next generation. if your tired of being a welcome mat for some asshole in a suit, then maybe its about time you bit that ankle and got some backbone. We just allowed us to become a gift for this mob,by having them, without a fight, garner us with another 1.5 trillion in taxes on us. lets see, iraq/ afgan war 7 trillion, guess who never asked? if bandages were cheap, we would be looking like a mummy. the market place study on pay hikes mention a pewney 1.5 % over past year, and unemployment at a low. my so called sen from NoDak hoven went on a rattle the can visit to a few local buisnesses in bismarck, his spew was this tax scam was a tax cut,,,and a jobs bill. cool, now tell us,with context senator, are they living wage jobs across the board,or another low wage,force more of welfare into a pool of never get out of poverty jobs again? of course,those questions dont get answerers, only dirty looks.. good luck America, swin or sink now..

  2. The talk about tax cuts helping the poor is just happy talk when proponents are forced to acknowledge the poor at all. Ultimately, the love of tax cuts comes from a conviction that acquiring the money is the same as earning and deserving that money. Taking it and using it to help poor people — whose very poverty is evidence of a lack of moral fiber — is unfair and unjust.

    Now, if you believe that the factors that lead to acquisition of wealth and poverty are more complicated than that, taxes make a lot more sense.

  3. How many tax credits (and loopholes) for businesses would this make? This would, of course, be an excellent idea if not for the many tax benefits already available to businesses. Businesses which are attempting to use RFRA to select their customer base will soon be applying for religious tax exemption status by qualifying as a church.

    “It would seem simple enough to attach some “accountability strings” that would base federal tax incentives on jobs created–to provide that, for every added job an employer could document, she would receive a tax deduction. Or better yet, a tax credit.”

    Is there any documentation of job creation under George W’s tax cuts to the wealthy, which President Obama erroneously did not allow to end on the date George W set? I have asked this question before…will George W’s tax cuts to the wealthy job creations begin before Trump’s? Who has brought their businesses back from out of this country to give Americans jobs? If Indiana businesses receive more tax incentives (cuts) in addition to Trump’s new tax bill; how will we pay those millions in incentives to Carrier who did NOT save jobs but are in fact laying off more employees? Trump and Pence were not even inaugurated when that tax incentive deal with struck. Who will decide these “accountability strings” with the Republicans running amok and ignoring this country creeping closer to war each time Trump opens his mouth or his stubby fingers type and send another Tweet?

    Even back in the 1990’s under Mayor Hudnut (still and always my hero); big businesses such as Allison’s were given additional ten-year tax abatements for NOT moving out of state after threatening to pick up their marbles and leave. We cannot pick up our marbles and go anywhere; we can’t afford it due to the economy and taxes.

    And; hasn’t Trump removed a number of exemptions for all working Americans who file income tax forms with IRS annually? Does his “claimed” tax cut for them offset these exemption removals? Sorry but…my children, grandchildren and a few of my great-grandchildren are getting ready to file their income taxes and most will probably owe Trump and IRS.

  4. Sounds good until dissected. Why should taxpayers in general pay employers to do what they should be paying from their profits to their poverty-stricken employees, many of whom as working poor are already on food stamps and beneficiaries of other federal programs? I am certainly for anything that ends or even ameliorates wage inequality, but having the general taxpaying public pick up the tab for employers’ responsibilities is not the way to go. Such a program might even encourage employers (on advice of their accountants) to cut the wages of their employees so as to qualify for tax cuts. The alternative? Pass a living wage law as some states have done and leave the taxpayers’ exactions alone to be used instead for education, roads and streets etc.

  5. We taxpayers should subsidize a company raising the pay of their low paid employees? And you don’t see the awful precedent this would set, Sheila? It’s a dreadful idea.

  6. While the idea of a tax credit that would entice businesses to improve the bottom line of their employees sounds ‘nice’, I believe that the minimum wage should be raised to a level that enables people to earn a living wage.

    Why should businesses be allowed to live off the taxpayers’ backs by paying their employees a wage that cannot possibly sustain a basic life that covers food and shelter expenses? Those business owners that employ people at minimum wage could easily afford to pay better wages, but why should they when the taxpayers are forced to pick up that tab?

    Most importantly, if a business claims that they cannot afford to pay their employees a living wage then those businesses do not deserve to be in business. We have got to stop propping up businesses that are robbing the taxpayers in order to give themselves a larger personal bank account,

  7. Sheila – you mentioned that Ruckleshaus is sponsoring just one of the anti-gerrymandering bills. I am aware of his bill, but could you tell us about the other anti-gerrymandering bills that exist? Thanks!

  8. Employers who don’t pay full time wages/benefits are relying on government welfare to help support themselves. The most egregious are the Waltons.

    It seems like this law moves that welfare from one spot on the public books to another. From an expense to a reduction in income.

    Better? I suppose that the ping pong ball poor maybe will feel better by keeping more of the wealth they create rather than then having to deal with public assistance.

    Perhaps that will make them a little less ornery about all of the other wealth redistribution going on.

  9. The word “taxes” in any form, for any reason, at this time strikes a nerve, sets our teeth on edge and we immediately get ready to fight. Tax cuts, reform, abatement, incentive, loophole! “A rose by any other name has thorns!”

  10. Since 2007, many of us over 50 have devolved from salaried careers with top-shelf benefits, to hourly-wage work. I am fortunate to work for Costco so my wage after 3 1/2 years is $14 / hr. with an excellent benefit package.
    However, it’s a far cry from the $40,000+bonus with really good benefits!!!!!
    I wish Ruckleshouse was looking out for ALL HOURLY WAGE EMPLOYEES!

  11. If Sen. Ruckelshaus is a republican, he buys the trickle-down theory. A republican who manages to avoid having fifteen or so other flaws common to his party is not absolved of the trickle-down fraud he or she promotes. It is likely that Ruckelshaus does not join the democratic party because he cannot bear to give up the trickle-down/flow-up bonanza. What is principled about that?

  12. I don’t get why a company has to be bribed to pay a decent wage. Does the company owner check his kristianity at the door? Shouldn’t helping to improve other’s lives be reward enough? Kristianity-no thanks.

  13. Another approach would be to tax employers at a very high rate unless and until they pay their employees a livable wage and provide them benefits. If the employer wants to move out of the country and still sell in the America market, the tax should be even higher.

    I’m afraid I have to agree with other commenters here. Senator Ruckelshaus’ approach is an improvement over the trickle down approach of others which does not target or hold accountable recipients. But it’s still corporate welfare to accomplish what employers should be doing anyway.

    In this carrot-and-stick world, we keep using the carrot with the same folks who haven’t responded well to carrots. I prefer incentives to penalties, but my patience has run out with those like the Carrier company who get millions in ‘carrots’ and still move jobs out of the USA. I refuse to buy an air conditioner or furnace made by Carrier and SO wish I could get a state tax refund for the dollars given that company. I’ll bet the laid off Carrier workers agree with me.

  14. I happen to agree with those that disagree with the State Sen. John Ruckelshaus proposal. This program would be nothing more than more red tape, from a bookkeeping standpoint. This plan is just trickle down with a ribbon around the pig. Bottom line the Ruckelshaus plan is just a shell game.

    The solution would be to raise the minimum wage to living wage.

  15. Nancy @ 11:34 >> I’m afraid I have to agree with other commenters here. Senator Ruckelshaus’ approach is an improvement over the trickle down approach of others which does not target or hold accountable recipients. But it’s still corporate welfare to accomplish what employers should be doing anyway. <<<

    Do not be afraid to call like is.

  16. Nancy Papas – Harper’s Magazine reports that the few jobs brought back at great expense to Hoosier taxpayers by Carrier are 100 percent automated. Nice that we subsidized the robotic employees, but tell me how that helps demand (the sole arbiter of economic growth) in Indianapolis. I haven’t seen any robots in the marketplace buying Buicks, Romaine or cottage cheese – have you? For an explanation, see corporate welfare, trickledown and political chicanery on steroids at Econ 101.

  17. “The solution would be to raise the minimum wage to living wage.”

    I see similar statements across the board; however, what is a living wage? What’s the dollar amount of a living wage? Do we consider that a living wage in Indiana might be a poverty level wage in California?

    I ran across an MIT ‘living wage calculator’ that illustrates a ‘living wage’ in every county in every state. What a wonderful tool for use with high school students who may, or may not, be considering their futures.

    http://livingwage.mit.edu/pages/about

  18. BSH – The living wage will vary greatly, of course. It costs more to live in Silicon Valley than in rural Connorsville, but what a living wage in a particular state is can be easily figured if voters can arouse any interest in such a plan among their legislators, and even if it were difficult to compute, such difficulty is no excuse not to pay corporate and other workers a living wage. As of now, you and I (speaking of corporate welfare) are paying big time money directly into the coffers of Sam Walton’s heirs and devisees by relieving WalMart of it obligation to pay a living wage to its employees. Someone tell me how such exactions from the public treasury into more Rolls Royces and Swiss bank accounts does anything for aggregate demand, the sole and final arbiter of economic growth.

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