Today, the President will travel to Cleveland in the industrial heartland to announce a series of tax and other incentives – most targeted at business – ostensibly aimed at stimulating the anemic economy. But like all things too good to be true, this doesn’t quite live up to the White House hype.  Taken together, they are of dubious job-creating value, but worse yet, the ultimate burden to business – tax and otherwise – will far exceed any benefit they may bring.

Take for example the research & development tax credit. This provision has routinely been renewed without controversy essentially for 3 decades until last year. The investment tax credit, too, seems unassailable on its face. But in making this proposal, the Administration trumpets its central weakness pointed out by the WaPo in its editorial last week, i.e., the abject lack of business expertise among the President’s advisers or Cabinet members. This is a proposal that someone unfamiliar with business would think that business would like. In a Wall Street Journal article on the topic today, one CEO says, "No one goes and builds a plant just because of a tax break. What's really needed is a thoughtful, cogent tax policy that everyone—consumers and businesspeople—can rely on for a number of years."

And therein lies the rub. The biggest impediment to business investment is not lack of capital – they have a record $1.8 trillion in reserves – but rather uncertainly brought about by the policies wrought by this Administration and the Congress. Think of the investment tax credit as an incentive to buy a house built on a marsh, or a flood plain. Would you take that deal?

Meanwhile, reports that the Administration is planning to increase taxes on those companies earning over $250,000 a year – which even the President’s former director of OMB says is a bad idea – will land disproportionately on small business. 48% of our sole proprietorships, partnerships, and S corporations would be hit with these tax hikes and beyond the direct hit, there is the hit to their customers. Although only 3% of all U.S. households would have to pay higher taxes, this group accounts for a whopping 25% of consumer spending.  As Mark Zandi argues: “If they pull back, even a bit, the recovery could be derailed.”

And so while the headlines from today’s event will tout massive tax break for business, we urge you to read the fine print. At the end of the day, the job creation potential is negligible, the stimulative effect nil and the cost to business - large and small - substantial.