Tax Holidays

Tax holidays do not create jobs, permanent tax cuts do.  Why?  Simply because a business would be foolish, and the manager would get fired by his/her boss, if they hired an employee based solely on a short term tax cut.  Sure, based on marginal analysis, some employees will get hired, but the insidious fact is that the longer they work for the company, the less effect the tax holiday has.  Say a $5,000 holiday.  If the employee works for 10 years, that holiday is only able to bridge $500 a year difference between productivity and cost.  Less actually if you account for the time-preference of money.