I am amused by the GOP crowd, led by McCain, about the tax cuts debate in the Senate.
Tax cuts don’t fix potholes, build nuclear power plants, or build schools. Any one of those activities create jobs, however, good jobs right here in the United States.
I just checked my pay stub. The company takes out $611 every two weeks out of my pay. If the government gave me a 100% tax cut and left that $611 in my paycheck starting right now, I would not go out and buy a car, let alone a US car, or a house, or a new vacuum cleaner. At best, I would pay off some debt. Most likely, it would get buried in my checking account and I would hardly notice. Giving me a tax cut would not motivate me to spend one dollar more than I already do.
Then they are talking about tax cuts for small businesses. I have founded my business back in 1993 and it now does between $4 and $5 million a year, with between 25 and 40 employees. When we started and grew, we accumulated a lot of tax losses that we can carry forward for years to come. That means we’re not paying any income taxes. A tax cut would create ZERO incentive for our business. At the same time, however, we have had to lay off people because we’re not getting enough work to sustain our size. So due to this economy, we have contributed to job loss figures. At the same time, we are cycling $4 million a year into the local economy by running a growing small business that is marginally profitable, but not profitable enough to pay taxes.
There must be a million small businesses like ours out there that create jobs, supply productivity, and curb the economy to which tax cuts are meaningless.
Mind you, I am not saying we should INCREASE taxes. Of course not. But in my own small world, tax cuts will make absolutely no difference to the economy.
What WOULD make a difference? If the stimulus package had funds allocated for states to spend money on software infrastructure to be more efficient, we are ‘shovel ready.’ We would hire our laid-off workers back immediately and we would pump that money right back into the economy.