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.