A Job Creation Tax

Abstract

A number of well-publicised submissions advocating a ‘Job Creation Levy’ were made to the Committee. In its report, however, the Committee is lukewarm in relation to this option. The case for a levy in the form of an income tax surcharge can be made in terms of conventional welfare economics criteria and considerations of equity. The main case against the levy is that it will merely reshuffle the dole queue and, at the same time, create ‘artificial’ jobs at the expense of ‘real’ jobs. Moreover, there may be some undesirable implications for aggregate labour supply.