Tax Analysts Blog

Tax Breaks Destroy Jobs

Posted on Mar 14, 2012

Most members of Congress say they want tax reform that (1) lowers the base and (2) broadens the base. But mostly they just talk about lowering the rate--the easy part--and ignore the tough choices required to broaden the base.

Worse still, they are continuously urged to move in the exact opposite direction and extend more tax benefits to targeted constituencies. They are told this will create jobs. This is true—but only in the businesses getting the benefits. Totally ignored are the job losses from other businesses that are left out in the cold. Economics tells us the unseen and ignored job losses are greater in number than the gains, as I tried to explain to Ways and Means Committee members at a hearing last week. This is not weird science. It is just the same logic that motivates tax reform that most members of Congress claim they endorse.

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