PHOTO COURTESY OF TEXAS WORKFORCE COMMISSION Texas Workforce Commission Chairman Tom Pauken, left, tours Tower Tech Systems Inc., a wind energy tower manufacturing plant in Abilene, with TWC Director of Governmental Relations Jesse Lewis, center, and plant manager Don Franks. Business owners who hire unemployed veterans or people ages 16- 24 could receive tax credits of as much as $2,400 per employee under a recently expanded Texas Workforce Commission program.

The veteran and youth categories were included as Work Opportunity Tax Credit "target populations" as part of the American Recovery and Reinvestment Act, the $787 billion law often referred to as the "stimulus" plan.

For the tax credits to apply, newly hired veterans -- those honorably discharged from the military -- must have been receiving unemployment benefits for at least four weeks. Youth must not have been regularly employed or regularly attending school for six months before their hiring date.

The addition of the new groups is retroactive to Jan. 1, 2009. Employers have until Oct. 17 to apply for certifications from TWC for applicants hired before Sept. 17.

A veteran of the Vietnam War, Texas Workforce Commission Tom Pauken said he is excited about the new incentives to hire former servicemen and women.

"This really helps our unemployed veterans," Pauken said. "The quicker they get back to work the quicker they can make the transition back to civilian life."

Veterans often make excellent employees, Pauken said, because they are willing to work hard and are accustomed to handling significant pressure. Young veterans, in particular, have handled responsibility beyond their years, the Texas Workforce Commission chairman said.

Although all eligible employers who hire from qualifying applicant groups can participate in the WOTC program, certain industries seem particularly well-suited for veterans, Pauken said.

TWC has helped place many veterans in oil-related industries, he said. Former military medics also have good opportunities to work in health care, Pauken added.

The WOTC program creates incentives for job creation, Pauken said, which the TWC chairman considers an essential ingredient in economic recovery. Stimulus plans -- both former President George W. Bush's and President Barack Obama's -- rely on a "flawed strategy" of increased government spending, Pauken said. Instead, he believes government policies should encourage hiring and capital investment.

Pauken favors replacing the national income tax with a sales tax and restoring the investment tax credit, repealed in the mid-1980s, to allow for accelerated depreciation on capital purchases within the United States. The TWC chairman also supports a border-adjusted consumption tax on goods and services imported into the United States, an idea promoted by Austin businessman David Hartman and often called the "Hartman Plan."

An 8 percent border-adjusted consumption tax, Pauken said, could replace the U.S. corporate tax rate without changing the amount of annual federal government revenue. The United States' average combined federal and state corporate tax rate is 39.3 percent -- second among Organization for Economic Co-operation and Development countries to Japan's 39.5 percent -- according to the Tax Foundation, a nonpartisan research group.

A border-adjusted consumption tax, Pauken said, would encourage domestic investment and help reduce outsourcing of jobs to foreign countries. Most of the United States' trading partners, he added, have import consumption tax rates of at least 15 percent.

Whether through job creation tax credits or other policy changes, Pauken said economic stability depends largely on incentives for investment and domestic employment.

"We need to change to a tax system that rewards savings and investment," he said.