For the first time, a major newspaper has talked to business, large and small, and has discovered--EUREKA--tax cuts will not spur hiring. Increased demand will.
Imagine, it's a front page story in the New York Times! Of course, it's not headlined in terms of the tax cut impotence. The headline reads simply: "Employers Say Jobs Plan Won’t Lead to Hiring Spur". But when you read the article, it's the tax cuts that businesses refer to when they say it won't affect their hiring plans.
(So now that President Obama has proposed tax cut measures, the media investigates and pronounces the approach toothless. Where were their investigators all these years the repubs were clamoring for tax cuts for "job creators"?)
But at any rate, I'm glad to see this information on the front page of the NYT now. Perhaps the secret will get out and become more widely recognized: tax cuts don't cause hiring--increased demand does. If this gets out, it will be hard for congressional repubs to pass only the tax cut provisions of the bill while leaving everything else on the cutting room floor.
See below the fold for some good quotes from the article. It's good ammunition to spread far and wide--write LTE's to local and national papers, use them in blog comments on trad media comment sections etc.
The New York Times interviewed numerous executives across a range of industries from companies large and small. Here's what they found:
As President Obama faced an uphill battle in Congress to win support even for portions of the plan, many employers dismissed the notion that any particular tax break or incentive would be persuasive. Instead, they said they tended to hire more workers or expand when the economy improved.
And here's a money quote from a small business owner:
"You still need to have the business need to hire,” said Jeffery Braverman, owner of Nutsonline, an e-commerce company in Cranford, N.J., that sells nuts and dried fruit. While a $4,000 credit could offset the cost of the company’s lowest-cost health insurance plan, he said, it would not spur him to hire someone. “Business demand is what drives hiring,” he said.
Economists do say the plan will create 500,000 to 2 million jobs. How? Not by the tax cuts for business. It's from putting more money in people's pockets! (As we have been telling them all along.)
Most of those jobs would be added, economists say, as workers spend the additional take-home pay that would result from a proposed payroll tax cut for employees. As consumers increase spending, that can prompt more hiring by retailers, washing machine makers, restaurants and more.
And, of course, some of the money goes very directly to job creation:
Some of the new jobs would also probably come from measures like the proposed $35 billion to retain or hire teachers, police and firefighters, as well as $30 billion to refurbish school buildings and $50 billion to build or repair highways, railroads, transit systems and waterways.
So, if Congress is going to strip anything out of this bill, it should be the business tax breaks, not the payroll tax holiday for people or the money going directly into hiring of public servants like teachers or the re-building of our infrastructure.
This story is not news to progressives, but at least it's out in front of the public in a more visible way, now, and we should quote it frequently to spread the message far and wide.