Has the world gone mad? The following story has turned inside out the idea that tax incentives create jobs. Top down, trickle down voodoo economics all of a sudden, doesn't really work like they said it would. Holy cow!
AP- It's a bipartisan jobs bill … has a problem: It won't create many jobs … tax experts and business leaders said companies are unlikely to hire workers just to receive a tax break. Before businesses start hiring, they need increased demand for their products, more work for their employees and more revenue to pay those workers.I'm sorry, after three decades of hearing how corporate and small business tax cuts creates jobs, it's turned out to be…not true.
Rick Klahsen, a tax expert at the accounting firm RSM McGladrey, said his clients need to see business pick up before they can hire more workers. "If demand were increased, they are saying it will take care of itself because I will then have the motivation to go out and hire new employees," Klahsen said.Even worse, the return on every million dollar tax break doesn't live up to the 30 year hype.
CBO estimates that such a tax break would generate only eight to 18 full-time jobs per $1 million in tax breaks. Bill Rys, tax counsel for the National Federation of Independent Business said. Right now, business owners just don't have customers," Rys said. "Until you have work for the employee to do, there's really less of a reason to hire a new worker."As proof of the hype, I just happen to have this glowing example of Republican job creation lying recorded just two weeks ago.
Looks like we can bury that myth....
Note: This entire discussion pertains to now, during the Great Recession.