I appreciate reading Greg Jayne’s editorial (“Time to dispense with belief that tax cuts equal jobs,” April 23), countering the notion that tax cuts equate to jobs. Allow me to expand on some points.
Here is a thought exercise: you own a profitable company running at 80 percent of capacity. If your tax rate is reduced, do you grow your business and hire more people? No, you are running at only 80 percent capacity. Now if demand for your product or service increases to the point that all employees are working 12 hours a day, six days a week, do you grow the business and hire more people? Yes. Demand drives jobs rather than available money.
Now Treasury Secretary Steve Mnuchin states that the new tax reform will be paid for in good part by “dynamic scoring,” the effect of economic growth promoted by tax cuts offsetting the loss of revenue. The problem is how much will the economy grow; it’s already running on low unemployment, high GDP — and what areas will grow? There is no guarantee that the growth will be adequate; we’re betting on the “two in the bush” side of the “bird in hand” equation.
The federal government spends more than it collects in revenues. The national debt continues to climb. Now the proposal is to reduce revenue now and pay with future alternative dollars?
