This note by Dr. Jan Eberly at the US Treasury pretty much demolishes the idea that regulatory uncertainty has anything whatsoever to do with our current non-recovery. I don't have a lot to add to it, so I'll just pull out the most telling points.
- Corporate profits are as high (as a share of the economy) as they were pre-recession, and the most regulated industries are among the most profitable
- Investment in software and equipment has grown at 5 times the rate of growth in the rest of the economy. Why invest so much if future regulation looks so dismal?
- Lenders don't see much risk difference between more and less regulated industries (as seen in bond market yields -- the interest rates the market demands)
- The U.S. markets are highly correlated to the German markets, though Germany has a starkly different regulatory environment. This means that the bad things in the US are tightly linked to the bad things in Germany (and I don't think our regulations trend very well with Germany's)
Basically, hiring is a reaction to increases in demand for goods and services now, or anticipated increases in demand for goods and services in the very near future. You need more people to sell more of your stuff, but you don't need them if you aren't selling a lot of stuff no matter how profitably you're selling it. This shouldn't be very surprising.
About personal income taxes:
I already did a whole big post about this. Basically, there is zero historical evidence that lowering the top marginal tax rate does good things for economic growth. Also, taxes are lower now than they have been in decades.
About corporate tax cuts:
Corporate taxes haven't really changed recently, and since they already have record profits, it's not clear why giving them even more money would raise hiring. If they were hurting for cash, I could see it. That said, our corporate tax code clearly needs to be reformed. We have some of the highest marginal rates in the developed world, but we get basically no taxes from a significant set of very large and profitable companies, and our loophole intensive tax code leads to average corporate rates similar to the rest of the world. The graph is from some old post in my reader feed.
You might be reading this and thinking that it should all be a wash... the averages are the same and some people do a lot better than average. The important thing to note is that the complexity of the corporate tax code heavily favors large companies that have been around a long time. It takes time and money to construct legal tax evasion. Why would we favor large incumbents over small startups? Probably because they can afford more lobbyists.
About capital gains taxes:
Basically, these are taxes on money made by buying low and selling high, and they are set lower than regular income taxes to