

Will the tax cuts lead to job creation?


Press file photo: Must be budget time.


Well, no tax hikes beyond what is in store for businesses to make the unemployment trust fund solvent again. That issue still is unresolved.

The budget agreement no doubt is good news for people who have been clamoring for government to live within its means, to show some fiscal responsibility for crying out loud, without resorting to nickle and diming businesses and millionaires.

But it likely is bad news – at least in the short term – for an economy that has been aided by government spending to get us through the recession. As economist Joel Naroff told me last week, the economy doesn’t care if a job is created by the public sector or the private sector. “A job is a job is a job,” he said.

Here’s the question: Is the deck now cleared for businesses to begin creating jobs in New Jersey? And, more to the point, is there a direct correlation between taxes and job creation?

1.) Yes. It’s obvious. Business people can’t expand here if they are paying so much of their income to fund the state government.

2.) No. It seems obvious, but the numbers don’t back it up. Corporate America during the last decade had plenty of tax cuts during the Bush Administration, but pocketed the money instead of adding to its payroll.

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