Tax policy as a form of economic engineering usually doesn't work, and even if it does, it is not very efficient. Here is an example from the St. Louis Post Dispatch.
"The Missouri Certified Capital Company Tax Credit program was designed to create jobs by funding promising small businesses. Instead, it has flushed many millions into companies that went belly up, according to Ms. McCaskill's recent audit. Missouri taxpayers may be forking over $470,000 for every job actually created."
The best way for government to support economic growth is to reduce barriers facing entrepreneurs and to stop trying to micro-manage the economy through tax schemes. Rather than targeting tax cuts or credits, simply reduce taxes. Entrepreneurs can then use the money to grow their businesses and create more jobs based on their understanding of their own companies and the markets they do business in.
