And that’s how we would spend our tax cut-driven windfall.
No new jobs?
No new jobs. Not even one. Not even a part-time one.
Why not?
Because the additional demand for our services is not out there right now. If we are going to create additional jobs and fill them, we will do it in response to increased demand in the marketplace for our products and services. That is the only reason to create jobs that makes good long-term economic sense.
Memo to Rep. Boehner: Say’s Law is defunct. A supply of product does not create demand; it creates inventory. A supply of workers does not create work; it creates cost. And, in the present economy, tax cuts for small business do not create investment capital; they allow us to pay down debt, repair or replace obsolete equipment, and put the rest in our pockets.
So much for new job creation. So much for “reinvesting in the economy.”
Our firm is certainly not going to hire people just because we have some extra money from a one-time tax savings. After all, who is going to pay for their salaries, benefits, payroll taxes on a continuing basis? Who is going to pay for their working space, equipment, and overhead? Who is going to pay to train and supervise them? Who is going to pay their other overhead costs?
We, the business owners, will have to pay those on-going costs. And a slight reduction in marginal tax rates will not come close to covering those costs. Tax cuts by themselves will not spur us to create even one new job. We do not create jobs until we have to, to meet increased client demand.
Now, if a big fat government contract came our way, then we would have an excellent reason to hire good people fast and put them to work as soon as possible.
But according to Mr. Boehner, that would not work. That would be “slow-moving government spending.” Worse, it would be “wasteful Washington spending, padding the bureaucracy and doing nothing to create and preserve jobs.”
Only tax cuts would work.
I wonder what Einstein would have to say about that.
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