It has been reported that President Obama in his State of the Union Address will propose the initiative to lower the capital gains tax for small businesses in the hope to create jobs because small business are Americas biggest job creators. This is a super stupid, super dumb and super foolhardy decision because it will be very expensive to the Federal government, create few jobs and these monies could be used in a thousand times better manner to create jobs. It deserves to be said that the White Houses plan to give small businesses a tax credit for every genuine new job they create is a home run as well as is their plan to continue the accelerated depreciation allowances for capital expenditures by businesses. The problem with this capital gains tax idea is the problem with many ideas often proposed in the political arena which is the practical effect wont meet the theoretical effect. The theoretical rationale for the capital gains tax reduction for small business is that American investors or even Americans toying with the idea of starting a business when they hear, for sake of argument, that lets say the Federal Government will lower the capital gains tax rate to zero they will be motivated to invest money in or start small businesses because when they sell this investment they wont have to pay any tax on the profit which is very appealing and by making this investment or starting this small business jobs will be created to fulfill these small businesses staffing needs. The problem with this theory is that investors or people interested in investing in or starting a business where a significant number of jobs will be created know that they will need to invest in the business for a medium or long length of time in order for them to increase the value of the business where they can sell it and recognize a good capital gain and regardless of what the politicians say by that sale time the capital gains tax will have returned to the higher level or gone to twenty or twenty-five percent (many Americans hope for the permanent capital gains tax rate) because long-term America needs to increase tax revenue to balance the budget and hopefully reduce the national debt (to bring the debt into historic levels in relation to GDP) these budget and national debt concerns are of untrumpable importance long-term. Therefore, since this capital gains tax reduction will almost certainly only be short-term its job creating effect will be minimal. To what should be for all good Americans alarm what will likely happen from this capital gains tax reduction is that widespread throughout America investors and business owners will sell their investments and businesses to take advantage of this once in a life time opportunity for a super low or zero tax rate and the American people will lose shocking amounts of money compared to what they could have gotten long-term if the capital gains tax rate was left untouched. Moreover, like what often happens when the federal government creates a tax advantage in the tax code, tax and investment professionals will exploit it and create capital gain tax shelters where investors can realize income short-term which will result in mostly wealth Americans getting a financial windfall at the expense of Americas treasury. What the White House should do if it wants to spur significant job creation from small businesses is listen to the experiences of small business owners that comes right out of their mouths. Many small business owners say and it really has the ring of truth to it is that if they could get a break on their health insurance costs they could use that savings to hire one or a couple or a few more workers and/or they could in some other way expand their business in a way that would create job growth. Why doesnt the White House propose giving small businesses a tax credit for one-third of their costs for health insurance for their employees and commit to this tax credit for five years so it makes sense for small business to make a long-term investment in a new employee. And so wrongful outcomes dont occur where people that dont deserve the tax break get it, why doesnt the Federal government limit the tax break so that businesses where an employee earns over $200,000 dollars per year the business doesnt get a tax credit for that employees health insurance premium costs and if the small business has a net income (that is their gross income minus their expenses) exceeds ten million dollars per year they are not eligible for this tax credit. Just think of the potential of this tax credit. Let us say a small business has fifteen employees and provides health insurance for those employees and that businesss health insurance cost per employee is say $6000/year a reasonable number, this tax credit would provide that small business with an additional thirty thousand dollars per year that is a yearly salary for many workers. The American people are tired of promises they want results on creating jobs and this health insurance tax credit idea will deliver!