THE BLOG

First the Jobs, Then the Tax Cut

07/14/2011 10:43 pm ET | Updated Sep 13, 2011

Looked at straight ahead, John Boehner's faith-based tax cuts are as nutty as creationism. There is simply no evidence to back his belief.

And yet -- if you turn Boehner's dubious proposition on its head, there may actually be a reasonable corporate tax break hidden in his upside down canvas.

Corporations should first show us the jobs; then we'll give them the tax break.

In other words, let the Bush breaks expire now. Close loopholes. Let corporate taxes go as high as this miserable Congress will allow. But -- any company that actually creates jobs gets a break. Increase your workforce by ten percent and a company would get a modest break. Increase it fifty percent and the break should be commensurate with the commitment. (Obvious caveat: no company should be allowed to lower wages as a means of paying for new hires. Your payroll has to rise as well.)

If tax breaks have any relation to employment, this could break the vicious cycle. Employers would have a motive to increase employment that is independent of demand. And, at least theoretically, that increased employment should lead to the increased demand we so desperately need.

But they won't get the tax break for free. They'd have to take positive action to see positive results.

Is this the best way of creating jobs? Probably not. I'd much rather put people to work repairing infrastructure, converting to renewable energy, and building high-speed rail. But if this Congress had been in place 150 years ago, they'd have passed on the telegraph and the trans-continental railroad. So tax policy may be the only tool we've got.

At the very least, we'd find out whether tax breaks really do have a positively effect on employment during a recession. We could base policy on evidence, not faith.