Why lower taxes doesn't help create jobs (contrary to GOP propaganda)

[Triana]

[BootinUp]

1. Its just not very complicated.

[Demo_Chris]

2. Taxes can be used to incentivize anything you like...

Jobs, investment, hiring practices, even the purchase of products. Literally anything you like.

Right now we are in a sort of catch-22 death spiral. Business have no need or incentive to invest in new employees because they are meeting demand as is. There will be little increased demand until more people get back to work. High rates are unlikely to change this, and might even hurt a recovery built on the backs of small individual entrepreneurs.

It's the same delemna when you look at minimum wages, trade agreements, whatever. Nothing exists in a vacuum, so the best plan is to not fuck it up in the first place.

[Triana]

3. "the best plan is to not fuck it up in the first place"

Like when corprat taxes and taxes on the wealthiest went down to the lowest levels now in history over the past 40 or so years?

I'd say.

[Xolodno]

4. A lot of companies...

...are sitting on stockpiles of cash. Refusing to invest it into the marketplace. Can't say I don't blame them. Currently taxes give them the incentive to invest into safe financial instruments with minimal tax liability.

Whereas creating/advancing products, expanding markets, etc. has a propensity to yield huge losses. Granted you can write that off...but a CEO is going to say why take a chance and watch the stock value plummet. No, let a competitor take the risk and then jump into the market if it looks like they are going to succeed. And of course the competitor is thinking the same thing.

The incentives need to be reversed, with such low interest rates (and low tax gains from interest income), make it so that companies sitting on cash beyond a set threshold get nailed so hard that holding cash above that threshold is pointless and would be better invested into the marketplace, successful or not. Plus if unsuccessful, the write off may allow the company increased gains on investment income.

Of course the other shoe to this, the government has to think that market conditions are ripe and is willing to go forward with this policy and take the risk of less tax income if its wrong.