I want to know who was the genius in the White House who thought it was a good idea to pass around a press release touting the “eight small business tax cuts” that the Administration has passed since being in office.

1. A New Small Business Health Care Tax Credit
2. A New Tax Credit for Hiring Unemployed Workers
3. Bonus Depreciation Tax Incentives to Support New Investment
4. 75% Exclusion of Small Business Capital Gains
5. Expansion of Limits on Small Business Expensing
6. Five-Year Carryback of Net Operating Losses
7. Reduction of the Built-In Gains Holding Period for Small Businesses from 10 to 7 Years to Allow Small Business Greater Flexibility in Their Investments
8. Temporary Small Business Estimated Tax Payment Relief to Allow Small Businesses to Keep Needed Cash on Hand

The small business bill that will pass next week will include eight more, by the way – another write-off for capital gains.

1. Zero Capital Gains Taxes on Key Investments in Small Businesses:
2. The Highest Small Business Expensing Limit Ever– Up to $500,000
3. An Extension of 50% Bonus Depreciation
4. A New Deduction for Health Care Expenses for the Self-Employed
5. Tax Relief and Simplification for Cell Phone Deductions
6. An Increase in The Deduction for Entrepreneurs’ Start-Up Expenses
7. A Five-Year Carryback Of General Business Credits
8. Limitations on Penalties for Errors in Tax Reporting That Disproportionately Affect Small Business

And yes, some of these are the same cuts that Obama is proposing in his new set of ideas, like the bonus depreciation, which would be at 100% instead of 50%.

So, if you agree with the President that we haven’t made enough progress on the economy, and if you agree that they have passed or are about to pass 16 small business tax cuts, why wouldn’t that leave you with the impression, that, er, SMALL BUSINESS TAX CUTS DON’T WORK?

Small businesses are suffering because the economy is in the toilet. And specifically because demand is in the toilet. Their entire issue can be summed up with the phrase “lack of sales.” Their taxes really aren’t the issue. But no politician ever lost a vote by passing a small business tax cut, so one gets shoehorned into almost every bill coming out of Washington.

I think the lending fund that the small business bill contains can help on the margins with successful businesses that have constrained lines of credit because of community banks with constraints on their leverage. But unsuccessful businesses are unsuccessful because they have no customers, not because they have high taxes.

I mean, the President made a big point in his press conference that we shouldn’t go back to the same ideas that failed in the past decade. That’s what I think about small business tax cuts. You can’t just hope demand will arrive, you have to create it.

P.S. I understand that the President is fighting this impression of being anti-business, and that letting the tax cuts for the rich expire would somehow be an “increase” on small businesses, which is completely absurd. But that doesn’t excuse the fact that these kinds of policies have been proven to have very little effectiveness at reversing the jobs crisis. If you want to use tax cuts, or you feel you have to, cut individual payroll taxes and give people more money to spend.