Linda Chavez

But businesses don't make decisions about expanding their workforce on the basis of one-year write-offs. If the president had even an iota of business experience, maybe he'd understand that. One-year tax breaks may improve the short-term bottom line for corporations, but successful businesses operate on a longer time horizon. Do the president and his advisers really believe that a company that receives a one-year $5 million write-off will go out and hire 100 new employees as a result? Not likely, especially since the cost of employing those workers will continue to rise long after the tax benefits have disappeared.

A tax rate cut, however, can motivate hiring. If a company knows that its tax bill is going down permanently, it may well be motivated to spend that money in hiring more people or in making capital improvements (which creates jobs for workers employed by other companies). But no responsible CEO would make such a decision on the basis of a one-time credit or write-off.

But cutting taxes is only half the solution. Tax cuts that produce real economic growth lead to higher revenues. But cutting government spending is by far the most important thing we can do to improve the economy. And those cuts need to come at the state and local as well as the federal level. Cadillac pensions and benefits for public employees are bankrupting states like California. And entitlement spending at the federal level must be brought under control -- as painful as it will be to do so. But few politicians in either party want to tackle Social Security or Medicare reform -- Reps. Paul Ryan, Mike Pence and a handful of others in the GOP are the exceptions.

We cannot tax and spend our way out of the current economic mess. American voters understand that. Now it's time for the politicians, especially the president, to get the message.


Linda Chavez

Linda Chavez is chairman of the Center for Equal Opportunity and author of Betrayal: How Union Bosses Shake Down Their Members and Corrupt American Politics .

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