The Pepsico action puts the "lower taxes on Corps" line into a political liability.

[salin]

http://www.democraticunderground.com/101448445#post25

Pepsico makes huge profits (earnings over cost) - and decides to cut thousands of jobs to ensure even more huge earnings.

a) clearly the job cuts in this case are not about "staying competitive" as the earnings are significant - they are competitive.

b) Extra money (big profits) such as bigger tax cuts (as proposed by every GOP presidential candidate) does not result in "creating new jobs" per business investment in the US. In this case the profits (very large) were deemed not large enough; the end result is a drastic reduction in workforce in order to attempt to double the profit. Put in the "tax cut" context - cuts without ties (eg. get a cut if start x number of jobs in US) this example demonstrates that no jobs are to be expected based on larger earnings (due to not having to pay as much taxes) and may indeed still lead to deep job cuts.

The point is that this is just one of many examples that demonstrates the proposed tax policies by all of the GOP candidates are based on ludicrous assumptions - when they try to frame the policies as ways of rebounding the economy.

I know I am far too verbose - I challenge those who read this to boil the essence of these points down to quick statements. In this short era where some of the occupy rhetoric of "the 99 percent) which resonates with many, such statements can be very potent.

[unblock]

1. the "lower taxes creates jobs" is almost entirely a canard.

employers hire when they can reasonably expect that hire to net a profit.

tax rates don't affect whether or not a hire nets a profit, it only affects how much of that profit goes to the government.
on the flip side, though, given that losses are deductible, higher tax rates also means that the government subsidizes corporations who guess wrong and whose hires net a loss. so in fact, higher tax rates lower the risk of hiring someone, making hiring MORE attractice when rates are high.

the only way it's really true that lower corporate tax rates increase jobs is very indirectly through the argument that the lower taxes amount to government spending (welfare for corporations) and government spending stimulates the economy and therefore leads to growth and jobs. but unless there's a dearth of investment capital (not even remotely true these days), there are far more effective ways of using government spending to stimulate the economy and thereby create jobs. giving the money to the poor being the most effective.

[salin]

2. 100% agree.