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TowneForCongress.

com
April 2010

Common Sense Fixes


the Job Market
Effective Solutions to the Unemployment Problem

by Jake Towne

“An invasion of armies can be resisted, but not an idea whose time has come.” - Victor Hugo

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Agenda
Explain Current Figures
Labor Economics Basics
List of Government Interventions
Solutions

Text of lecture available at http://towneforcongress.com/platform-issues/jobs

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Bureau of Labor and Statistic Figures

http://www.bls.gov/news.release/empsit.t15.htm

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Unemployment Rates 1930-1941

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The Unemployment Rate is >17%

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Economic Transactions

= ?

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Austrian View of Transactions

Orange
Owner
<

Money
Owner
>
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Austrian View of Transactions

? ? ?

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Gov't Interventions in the Labor Market
(just SOME of them)
PA/US Corporate Profit Tax of 42%
Social Security Flat Tax of 12.4%
Medicaid/care Flat Tax of 2.9%
PA State Income Tax of 3.07%
Local Payroll Tax of ~1-2%
FUTA/SUTA Unemployment Tax of ~2-8%
Workman's Compensation Tax of ~1.5%
Federal Income Tax of 15-25%
Inflation Tax of ~8%
Federal Minimum Wage of $7.25/hr

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The Cost of Gov't Intervention
$14
$1.00
$0.72
$12 $1.12
Employer Profit
$0.77
Profit Tax
$10 $0.55
$0.77 Inflation Tax
Employer FICA
$8
$1.80 Workmen Comp/
FUTA/SUTA
$0.40
Employee FICA
$6 Federal Income
Tax
Local and State
$4 Income Tax
$7.04 Take-Home Pay

$2

$0

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The Cost of Gov't Intervention

Take a $10/hr job. Firm desires $1/hr profit


Corporate profit tax means ~$2 profit need
Employer-paid taxes raises costs $2
Employee-paid taxes costs about $3
End Result: Worker must generate
$14+/hr but take-home pay is just $7

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Solutions
Repeal Sarbanes Oxley Act
Saves over $100 billion/year
Zhang, Ivy. 2005. "Economic Consequences of the Sarbanes-Oxley Act of 2002." pp. 22-
23/68. Zhang also notes that the equity market loss may have been as high as $1.4 trillion.
http://w4.stern.nyu.edu/accounting/docs/speaker_papers/spring2005/Zhang_Ivy_Economic_Con
sequences_of_S_O.pdf

Slash the $1.1 trillion per year costs of


federal regulatory compliance.
Crain, W. Mark. 2005. "The Impact of Regulatory Costs on Small Firms." p. 8/95.
http://www.sba.gov/advo/research/rs264tot.pdf

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Solutions
Slash the 9.99% PA state corporate tax.
Remove laws that threaten firms with frivolous
lawsuits when firing workers.
Remove laws that prevent firms from hiring workers
by mandating criteria outside of the only question that
really matters – can they do the job?
Remove the unfair labor union laws that forbid
employers to hire new workers who would do the same
jobs for less.

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Solutions
Remove the Workman's Comp. mandate
Remove payroll tax withholding for employees
Make Social Security and Medicaid voluntary
Abolish the federal income tax

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Abolish the Federal Income Tax:
It's Immoral!
“1. Abolition of property in land and application of all rents of land to public purposes.
2. A heavy progressive or graduated income tax.”
The First 2 Planks from Karl Marx's Communist Manifesto
The Income Tax is a Marxist idea implemented in
1913 as retribution against the "evil capitalists" who had
caused the Panic of 1907. The end result of this
practice has been to heavily tax everyone.

The government has no right to the first


claim on your labor. Only you should.

Plundering those who have acquired


property in a just manner only serves to
deter them from acquiring more.
http://towneforcongress.com/platform-issues/income-tax

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Abolish the Federal Income Tax:
It's Unnecessary!
2008 Federal Outlays %
2008 Federal Inlays in Billions of USD “Just” $67 Billion needed to run judicial,
Source: http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf
executive, and legislative branches.

$410 B or 14% $68 B or 2%


Deficit Spending Excise Tax

$1,220 B or 41%
Federal Income Tax
$910 B or 31%
Social Insurance
Tax

$345 B or 12% Large cuts in the overseas military


Corporate empire, projected at $1 Trillion annually
Income Tax
would help eliminate the need for a
Total 2008 Federal Budget was over $2,900 Billion federal income tax.

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Solutions
Restore Sound Money
Reduce or abolish the federal
minimum wage

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Replace the Socialistic Keynesian Government
Status Quo with the Austrian Free Market
Keynesian Economics
The “Money Power” is held by the
Government & Bankers
Government 'Commands' the Economy
Renown for Deficit Spending and
Stealing via Currency Debasement
Redistributes Wealth to the Military-
Industrial Complex, Banking Cartels,
Special Interest Groups & Corporations
Allows and Rationalizes Government
Takeovers of Private Businesses “In the long run, we are all dead.”
May promote “capitalism” and the “free
market” in word, but in deed functions as - Lord John Maynard Keynes
British Economist and
“Crony Capitalism,” “Vulture Capitalism,” the Central Planner
“Corporatocracy” or “Disaster Capitalism”

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Replace the Socialistic Keynesian Government
Status Quo with the Austrian Free Market
Austrian Economics
The People own the “Money Power”
Government Plays No Role in
Economic Planning
Promotes Honest Money & Balanced
Budgets
Highly Rewards those who Create
Wealth and Shares it with All
“All those intent upon Government Does Not Takeover
sabotaging the evolution
towards welfare, peace, Private Businesses
freedom and democracy, Promotes Free Market Capitalism
loathe gold.” and laissez faire, or “let them be!”
- Ludwig von Mises economics
Founder of the modern
Austrian School

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Q&A

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Graphics Acknowledgements
Unless listed below, all photos are either mine or public domain.

The “Towne 2010 – As Good As Gold” logo was created by Derek Wyatt

The Jake Towne for United States Congress logo was created by Anthony Geist

Document Copyright
Copyright © Jake Towne, 2010. Any portion of this presentation that could be
copyrighted is owned by myself and I hereby released it to the public domain. I
grant full permission to use any of the ideas or material within. You may republish
this work. Attribution to myself is appreciated but not required.

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