Milken-NAM Study: Cutting Taxes & Increasing Infrastructure Spending Creates Jobs

Milken Institute - A National Association of Manufacturers funded study "Jobs for America: Investments and policies for economic growth and competitiveness" finds that changes to U.S. economic and tax policies can add 2.9 million jobs by 2019 and more than 3.5 million jobs can be created in each of the next three years by supporting investment in 10 key infrastructure project categories. The study analyzes two different approaches to how the United States can retain and create new jobs – one on the policy side and the other on the investment side. The first outlines the potential growth in jobs and GDP that would result from changes to economic and tax policies and the second calculates the impact that $437.4 billion in government-supported infrastructure investments would have on job creation and the economy.

Policy recommendations:

• Reducing the U.S. corporate income tax rate to match the OECD average would trigger new growth.
• Increasing the R&D tax credit by 25 percent and making it permanent. 
• Modernizing U.S. export controls could increase exports in high-value areas. 

[Updated] A similar report from Jan 2009 undertaken for AAM by a team of researchers at the University of Massachusetts-Amherst’s Political Economy Research Institute (PERI), found that at least 2.6 million new jobs could be created by increased spending in a “high-end” scenario of $148 billion per year (including $93 billion in public investment). While the construction and service industries will see the vast majority of job creation, manufacturing, which has been devastated by the current economic crisis would also benefit from such an infrastructure stimulus, seeing an increase of 252,000 jobs nationally.