President Obama, from Wednesday’s speech in Cleveland announcing new tax incentives for businesses:
I’ve never believed that government has all the answers to our problems. I’ve never believed that government’s role is to create jobs or prosperity. I believe it’s the drive and the ingenuity of our entrepreneurs, our small businesses; the skill and dedication of our workers that’s made us the wealthiest nation on Earth. I believe it’s the private sector that must be the main engine for our recovery.
Republican gubernatorial candidate Tom Emmer, in Monday’s speech announcing tax cuts and incentives for businesses:
“The biggest problem we face is not that government has a budget deficit, but that Minnesota has a jobs deficit,” Emmer said at Permac Industries, which makes parts for medical device manufacturers and other industries. …
“I am not here to say I can save or create some number of jobs,” Emmer said. “Governors and governments don’t do that, despite what some might say. What we can do is create a business climate that will lead to job creation.”
What’s striking about two such different politicians is that their proposals engendered the same cautious reaction from the business community, at least when it came to hiring.
From the Strib’s front-pager about Obama’s proposed research-and-development and capital-equipment tax breaks:
Douglas Frame, president of Minneapolis-based manufacturer Phoenix Solutions Co., said he supports tax breaks for research and development for businesses, but doesn’t expect it to lead to an immediate boost in jobs. …
Many businesses say the key factor in their spending decisions is the availability of good business opportunities, not tax consequences.
The Minneapolis-based biotech and hematology company Techne doesn’t see a meaningful effect on hiring from the tax credit on research and development. John Syverud, assistant director of business development for Techne’s subsidiary R&D Systems, said the subsidiary already invests about 10 percent of its revenue in new product research.
“Our spending is driven by our interest in maintaining the growth of the company, as opposed to being driven by tax policy,” Syverud said.
From the Strib, on Emmer’s rollout of r-and-d credits, corporate rate cuts, deductions and property tax reductions.
Permac CEO Darlene M. Miller offered her firm support of Emmer’s proposal, though she said even if the tax cuts were enacted immediately, it probably wouldn’t spark any immediate hiring at her company.
It seems pretty clear that tax cuts won’t solve the job problem in the near-term — which, let’s fact it, is the reason Dems are going to get pasted in November. It makes you wonder if tax cuts would make a difference in the first few years of an Emmer term.
Although I’m a big lefty, I don’t bring this up for partisan purposes. I don’t want to dismiss the contention that reduced taxes will mean more hiring over time or that Emmer’s cuts, which seem more permanent than Obama’s, might be better targeted. But I do think we need to think about how much magic politicians of any party have to offer on the jobs front this election.
By the way, as pure economic stimulus goes, both proposals represent a drop in their relative buckets: Obama’s are worth $100 billion or so a year in a $14 trillion economy; Emmer would inject about $300 million into the state’s $217 billion gross domestic product.
What do you make of all this? Do you see business tax cuts triggering more hiring, more quickly, or believe that one plan is superior to the other? No ideological boilerplate, please.