“We need reforms that can reverse this [consumer demand] course. And taxes do come into the picture when a company is looking for a state to locate their business.”

You were talking about consumer demand being the driving force for businesses expanding, then you switched to taxes again. I submit that cutting taxes for businesses in the competitive manner you suggest will in fact have the opposite effect on increasing consumer demand. See Jeff Moser’s post here: http://thegazette.com/conversations/what-issues-are-important-in-the-iowa-senate-18-race/#comment-1058471

Besides what the low wage thing Jeff points out in his post, also when States lower taxes to attract businesses, in the manner you suggest, this means States have to make up the budget difference by either cutting govt jobs or cutting govt workers wages/compensation, or cutting entitlement spending, or raising property taxes on residential folks. When States have to layoff teachers, police, firefighters, and other govt workers, cut their salaries/compensation, or cutting entitlement/welfare spending for the poor working class, or raise other taxes on residential consumers to make up the difference, this reduces all those folks buying power and will decrease consumer demand and decrease the need for the business to hire/expand.

You and Golding acknowledge that consumer demand is in a “standing still pattern” and this is what we should be focusing on. So let’s not use this recession an excuse to foolishly cut State taxes that will ultimately have the opposite effect on the goal of increasing consumer demand which we are trying to achieve.

The govt should be doing more things to putting more money into govt workers, working poor, and residential folks hands- not taking it away from them to put into the hands of businesses that will not expand anyway without that increase of consumer demand.

C’mon Pat, read all of Randall’s posts. A business owner takes into account a dozen or more factors when deciding to expand a business, with demand (market) and taxes being just two. You don’t just have one thing that makes your decision for you.

In an environment of recession, or at the very least a slow economy, the tax situation becomes more relevant than in a boom period.

The question is this: With all OTHER things being equal, would he be more likely to expand with a yearly tax being $8k-$10k less, or by receiving a one time credit of $2,000 per new employee he hires? That answer is obvious.

The bigger question is: Are either of these ideas feasible given all the of programs which are already supported by taxes which aren’t set up to cover them long term? Doubtful.

By the way, I’m pretty sure the government should not be doing more things to put “more money into govt workers”. That’s not why government exists.

Chris. That was not exactly the point I was making with my ‘race to the bottom’ reply to Randall, but I will address your point as well because it I well taken.

Sure all things being equal and under normal economic conditions you are right; A business owner takes into account a dozen or more factors when deciding to expand a business other than just market demand. However you and Randall fail to acknowledge that under the current economic conditions it is just as Golding said that if you ‘do not have the business to sustain that person’s salary” you will not hire/expand.

You could give all the tax cuts and tax credits in the world to businesses, and they will just pocket that extra money and not expand until they have a reason to because they want to maximize their profits under the current market conditions. Despite the tax rate, a business will not hire someone if they don’t have high enough consumer demand to keep that employee busy.

Taxes are at a 60 year low, so the prescription to the current economic problem is not even more tax cuts for business. The prescription is businesses need customers who have buying power. The best way to put money into business hands to get them to hire is to enact govt policy that will help increase money they get from sales profits by helping encourage consumers to buy their good/services, not business tax cuts which do nothing to increase consumer product/service demand. We don’t need govt policy to ‘directly’ put more money into businesses hands because that does nothing for the NEED for the business to hire/expand (but coincidentally corporations are the ones with the most lobby power and influence over our govt policy who are trying to use the recession as an excuse to get what they always wanted-lower taxes and less regulation). Our govt policy should ‘INDIRECTLY’ put more money into businesses hands by first putting more money into consumer’s hands so consumers have more purchasing power. Giving tax cuts to consumers/workers would help better, putting people to work on govt projects would help better, and giving state govt aid to prevent the layoffs of state workers would keep consumer demand from getting worse. Once consumers have jobs and more purchasing power to start buying more goods/services only then will businesses start to hire under the current conditions. We can put money into consumer’s hands, instead of just businesses’ hands, with the things outlined in President Obama’s jobs plan here: http://www.washingtonpost.com/business/economy/breaking-down-obamas-jobs-plan/2011/09/08/gIQAaZpEDK_graphic.html Unfortunately Republicans refused to even consider debating this plan because they want the economy to get worse under Obama’s watch.