Amid all the grand promises President Barack Obama made in his jobs speech to a joint session of Congress on Sept. 8 lurks a set of contradictions around which the whole, highfalutin mess collapses.
Under the American Jobs Act, the president said, small companies that hired new workers would get tax credits. Great.
All companies could continue writing off investments in the year they made them—at least through 2012. Great.
Companies would get extra tax credits for hiring military veterans. Great.
Companies would earn tax credits for hiring workers who'd unsuccessfully sought jobs for more than 6 months. Great.
But wait.
The legislation also would reform the tax code to "eliminate pages of loopholes and deductions" so that "we can lower one of the highest corporate tax rates in the world."
Done right, reform like that would be great, too. Everybody knows the tax code is an incomprehensible monstrosity concocted from political favors and efforts to manipulate behavior.
Real tax reform indeed would simplify while lowering rates overall. But lowering rates would reduce the incentive value of the credits and deductions the president proposes, which certainly wouldn't simplify anything.
And without simplification, there's no reform—just more of the same old shenanigans with different political favors and manipulations.
Or maybe Obama means reform for some industries but not others, such as oil and gas, whose "loopholes" he proposes to close to pay for all these new loopholes, the addition of which means none of the simplification essential to genuine reform.
Whatever Obama means, it's difficult to see how generally reduced corporate tax rates fits anywhere in all this, welcome though lower rates would be.
Obama's speech writers seem to have been so intent on baiting Republicans, which seemed to be the core motivation, that they failed to see their own loopholes of logic.
The president delivered the speech well, as usual. But he should hope Americans paid attention to his articulation and timing instead of his words.
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