Callahan's Five Point Jobs Plan:
1. Eliminate tax loopholes for corporations that outsource our jobs overseas or use off-shore accounts to avoid paying their fair share.
2. Provide tax credits for small businesses that hire new employees.
3. Make college more affordable and job training more available.
4. Cut wasteful spending and reduce the national debt in order to reassure financial markets.
5. Cut the red tape and bureaucracy that holds small businesses back.
Below are the details
Jobs Plan Point #1: Eliminate tax loopholes for corporations that outsource our jobs overseas or use off-shore accounts to avoid paying their fair share
“It's time we stop rewarding those companies that are taking advantage of the tax code and shipping our jobs overseas. Instead we should use that money to create and attract new jobs right here in Pennsylvania.”-Mayor John Callahan
For too long Washington has been spending money it doesn't have. As Mayor, I can't do that. As a result we've had to tighten our belts so that Bethlehem can continue to stay fiscally sound. If this country is going to move forward we have to do the same in Washington. That's why the first plank of my jobs plan pays for the rest of it. Being a leader isn't just about having good ideas, it's also about being able to pay for them.
By preventing companies that ship jobs overseas from getting tax breaks and going after those that abuse loopholes in the law to take advantage of offshore tax havens, we can save billions each year and use that money to cut taxes and create jobs here at home.
Prevent Congress From Giving Tax Breaks to Companies that Outsource Jobs
It's really pretty simple; we shouldn't be giving tax breaks to companies that send our jobs overseas. Until recently that's exactly what was happening.
The reality is staggering; in the first half of this decade U.S. multinational corporations added 784,000 jobs abroad but cut 2.1 million in America[1]. As one economist recently noted, “The U.S. tax system does provide an incentive to locate production offshore [2]." My opponent apparently thought this was perfectly fine. In fact he’s been given multiple opportunities to stop these companies from receiving such tax breaks, but again and again [3] he has sided with the companies that are outsourcing our jobs over American taxpayers. Dent even voted against helping workers who lost their jobs because of outsourcing[4].
I have a different view; if a corporation ships quality American jobs overseas than they simply should not be given a tax break for doing so. It’s only fair. Instead we should direct those tax breaks to small businesses that are creating jobs right here at home.
Stop Allowing Companies to Set up Tax Havens to Avoid Paying American Taxes
If you or I try to evade paying our taxes we’d go to jail. When executives at large companies do it, they are rewarded with higher share prices and bonuses. As a result, many large corporations create “headquarters” in the Caribbean that are nothing more than post office boxes to avoid having to pay their fair share in the United States.
In fact one recent estimate showed that large corporations have used this loophole to avoid more than $37 billion in American taxes each year[5]. Imagine how many more jobs small businesses could have created with these tax breaks. We have to collect the taxes these companies owe and stop allowing them to evade the IRS with a P.O. box.
Yet again my opponent doesn’t seem to agree with this position. Dent has not only voted against fixing this [6], he’s even repeatedly voted to allow the government to hire these companies as contractors [7]. We can stop this today and collect billions in taxes due to the United States by voting to prevent these companies from shifting income to a another country.
Jobs Plan Point #2: Provide tax credits for small businesses that hire new employees
“Small businesses are the engine of economic growth, until we get them growing again our economy will continue to stall. Instead of giving tax breaks to companies that send jobs overseas, we should give them to the small businesses growing jobs right here at home.”-Mayor John Callahan
The vast majority of new jobs are created by small businesses. In fact, over the last few years, Pennsylvania businesses with fewer than five employees created nearly 50 times more jobs than firms with more than 500 employees [8]. Despite this fact, too often Washington showers tax breaks to large employers without giving small businesses the tools and tax policies they need to succeed.
There’s an old adage that you tax what you don’t want. Unfortunately, today there are too many taxes associated with hiring a new employee, especially for small businesses. Since this recession started, the Lehigh Valley area has lost nearly 17,000 jobs [9] and, if this trend is going to be reversed, we must do everything we can to encourage job growth.
Congress made some improvements with the recently passed HIRE Act, but these improvements must be expanded to make it as easy as possible to hire new employees. In Congress, I will work to make sure that any small business creating a new job is given a significant tax break to help defer the costs associated with hiring new workers, and reduce restrictions on job creation. With the recent passage of H.R. 1586, there’s about $1.4 billion in net deficit reduction, a portion of these funds could be redirected to pay for these tax cuts.
- Expand Tax Credits for Small Businesses that Hire New Employees- Following where the HIRE Act left off, we must continue expanding the eligibility of companies to reduce payroll taxes for the first year of a new hire.
- Allow Small Businesses to Defer Taxes for First Year of Existence- The current economic climate has made it difficult for any business to succeed, but this is especially true for new small businesses. To help these startups succeed, the federal government should allow these firms to temporarily defer their taxes for the first year of a startup’s existence. These firms will still have to pay their taxes, but this will allow them a better chance to finance job creation and get their firm off the ground. To qualify the company must create at least one new job, qualify for an SBA loan, and not have profits exceeding $200,000 in the first year.
- Remove Fees for Starting a New Business- If you want to start a new business in Pennsylvania, there shouldn’t be any cost. As long as you can show that this business hired at least one person that wouldn't be employed otherwise, then the government should waive its first year's fees. To accomplish this, I propose creating a refundable tax credit for all eligible businesses of up to $500.
Charlie Dent apparently doesn’t agree with this approach. He voted against the HIRE Act [10], and instead has repeatedly voted to continue the tax breaks for companies that ship jobs overseas and dodge U.S. taxes. Considering that large corporation’s PACs have given Charlie over $1.7 million [11], his position is disappointing, but not surprising.
Jobs Plan Point #3: Make college more affordable and job training more available
“It used to be that a solid middle class life didn’t require a college degree, but outsourcing and cheap overseas labor is changing that. Unfortunately college is too expensive for many today. We must make sure that anyone that wants to attend college or is seeking job retraining in a technical school can afford to do so.”-Mayor John Callahan
The reality is startling; the unemployment rate among those with a college degree is just 4.5% compared to more than 10% for those with just a high school diploma [12]. In other words, you’re twice as likely to be unemployed if you don’t have a college degree. As an economist recently noted, “The supply of college graduates is not keeping pace with demand.” [13] To create jobs over the long term, it is clear that we must increase the number of people who get a college education.
The only way to do this is to make sure that college is affordable for all. Unfortunately, for the last two decades tuition increases have far exceeded inflation and now the average total cost of a public college exceeds $30,000 [14]. We must make college more affordable by providing greater access to loans and grants if future generations are going to have a chance to succeed.
- Increase Student Loans to Reduce Total Costs for College- The quickest way to make college more affordable is to increase the number and amount of Pell Grants and Stafford loans given out each year so that every child born today can be given the same opportunities I was.
- Bring in More Employers to Help Cover the Costs of Technical College- We have some of the best colleges, universities, and technical schools in the world right here in the Valley. We must do a better job of leveraging this advantage by creating more partnerships between schools and employers. Over time these programs will even attract new employers to the district.
- Training our workforce for 21st century jobs- Employers all over the country are in desperate need of highly skilled workers, but they face a workforce that lacks the skills employers need. By partnering with these employers we can reduce the cost of technical colleges to the students and increase the likelihood that they will have jobs upon graduation. The employers will have the skilled labor force they need and employees will have a much higher likelihood of being employed upon graduation.
- Increase Scholarships for High Needs Teaching Professions- As the economic composition of the country continues to change, we are starting to see significant shortages in certain teaching professionals. For example, the nationwide shortage of nursing instructors is actually forcing schools to turn away qualified applicants. In our K-12 schools, there is a lack of qualified math and science teachers. By providing loan forgiveness and scholarships, we can reduce these bottle necks and get people back to work and get our kids and grandkids the skills they need.
Charlie Dent was given the chance to dramatically reduce the cost of student loans by removing the banking middle-men from the process. Instead Charlie voted to keep the status quo [15], making sure the banks could make guaranteed profits and students would be forced to make higher interest payments.
Jobs Plan Point #4: Cut wasteful spending and reduce the national debt in order to create a brighter future for our children
“When we take on too much debt, we are simply making our kids pay for our irresponsibility. That’s just not right, and it’s something we have to stop. I significantly cut our debt and I’ll work to do the same in Washington.”-Mayor John Callahan
In Washington when they want to spend more money they can just print it. As Mayor I’ve never had that option, and instead have consistently focused on reducing the city’s debt to put Bethlehem on firm financial footing.
Here again Charlie Dent just doesn’t get it. He’s voted to increase the national debt by more than $3 trillion while he’s been in Washington [16]. He voted to give Wall Street an $850 billion bailout [17], and repeatedly voted for large deficit spending [18].
Meanwhile in City Hall, I began a program called Continuous Improvement which was based on a public/private partnership started at Air Products. This program focused on cutting government waste and to date, we’ve cut $10 million. If you send me to Washington I’ll take this model to Congress. Here’s how I’ll do it;
- No More Bailouts- The American taxpayer cannot be held financially responsible for the mistakes of Wall Street. Yet thanks to Charlie Dent, that’s exactly what’s happened [19]. In fact the inspector general for TARP estimated that the bailouts could have cost us as much as $23.7 trillion in the worst case scenario, nearly twice the GDP of the entire country [20]. Even under the best case scenario, the bailout will have cost us nearly $100 billion [21]. Ending this practice will save taxpayers billions and significantly reduce the debt.
- Freeze Non-Defense/Non-Entitlement Spending- Government has simply grown too much over the past fifty years. Necessity is the mother of invention and by freezing non essential spending we can increase government efficiency and reduce spending. At the same time we must protect our seniors and most vulnerable so entitlement spending would be excluded. Entitlements include Medicare, Social Security, Medicaid and the V.A.
- Support Pay as You Go Rules- As this economic crisis unfolded, it was clear that something had to be done and that’s why I supported the Recovery Act. Over the next few years, we must install discipline in Congress to make sure that it doesn’t spend money we don’t have. To that end I won’t support legislation unless it is paid for. Unfortunately Congressman Dent supports deficit spending, that’s why he’s opposed PAYGO legislation [22]
- Reward Innovation- Today there is little incentive for a government employee to identify and fix wasteful spending. In fact, in many cases they are discouraged from doing so because it could reduce the agency’s future budget. To change this I will work to create a reward program that pays government employees a bonus for finding significant cost savings and prevents superiors for punishing them.
These simple reforms will start to set the country on firm financial footing and make sure that the next generation doesn’t have to pay for the spending of ours.
Jobs Plan Point #5: Cut the red tape and bureaucracy that holds small businesses back
“Too often government bureaucracy can get in the way of getting the job done fast and efficiently. In Bethlehem we've saved millions and increased services at the same time through Continuous Improvement. I'll work to do the same in Washington.”-Mayor John Callahan
In the private sector competition makes sure that companies are constantly seeking new efficiencies and reducing costs. Government doesn't face this same type of competition and the results often show it. For citizens this means getting permits and licenses takes too long and for taxpayers it means government services simply cost more than they have to. As Mayor of Bethlehem I initiated a program called Continuous Improvement that seeks to change the mindset of government. By constantly looking for ways to improve government, the city has been able to save millions and increase services. Just consider some of the successes;
- In Bethlehem we were spending almost as much on administrative costs associated with processing extremely small purchase orders as we were actually making the purchases. By streamlining this process and reducing the number of small purchase orders, we were able to save the city nearly $100,000 a year.
- Previously there was almost no formalized process for preventative maintenance on police vehicles. The result was hundreds of hours wasted while police officers tried to get their vehicles fixed. The new online system reduced the number of calls to the city garage about police vehicles by 95% and significantly increased the amount of time cops can spend on the street.
- By streamlining the process for small business permits, we have cut the number of days for completion of paperwork from an average of 41 days to 14.
We can apply this same mentality to Washington and in the process save literally billions of dollars. I’ve done it in Bethlehem and I know I can do it in Washington D.C.
[1] "Does tax code send U.S. jobs offshore?", Lynch, USA Today, 3/21/2008
[2] "Does tax code send U.S. jobs offshore?", Lynch, USA Today, 3/21/2008
[3] H.R. 1606, Vote #517, 8/10/2010
[4] H.R. 27, Vote #47, 3/02/2005
[5] "Small Businesses Go After Offshore Tax Havens," Browning, New York Times,
7/19/2010
[6] H.R. 5982, Vote #514, 7/30/2010
[7] H.R. 3058, Vote #351, 6/30/2005
[8] Small Business Profile Pennsylvania," SBA Office of Advocacy, 10/2009
[9] U.S. Bureau of Labor Statistics
[10] H.R. 2847, Vote #90, 3/4/2010
[11] "Charlie Dent Career Profile," Center for Responsive Politics
[12] "Employment status of the civilian population 25 years and over by educational
attainment," Bureau of Labor Statistics, August 2010 Release
[13] "Why We Need a Second Stimulus," Tyson, New York Times, 8/28/2010
[14] "Tuition and Fee and Room and Board Charges Over Time," College Board, 2009
[15] H.R. 1, Vote #46, 1/28/2009
[16] H.Con.R. 95, Vote #149, 4/28/2005, H.J.R. 102, Vote #540, 12/8/2006, H.R. 1105,
Vote #86, 2/25/2009, U.S. Treasury Department
[17] H.R. 1424, Vote #681, 10/3/2008
[18] H.Con.R. 95, Vote #149, 4/28/2005, H.J.R. 102, Vote #540, 12/8/2006, H.R. 1105,
Vote #86, 2/25/2009
[19] H.R. 1424, Vote #681, 10/3/2008
[20] "Bailouts Could Cost U.. $23 trillion," Javers, Politico, 7/20/2009
[21] "Geithner Says Bailouts to Cost Taxpayers $87 Billion," Bloomberg, Katz, 4/23/2010
[22] H.R. 4297, Vote #67, 3/16/2006