Some Democrats in Congress don’t like President Obama’s new proposal to offer payroll tax credits to employers to encourage job creation. Their objection? The tax cuts are piddly. From the Washington Times:

Rep. Mike Thompson, California Democrat, questioned whether a $5,000 payroll tax credit for every net new employee is strong enough to have an impact on the country’s 10 percent unemployment rate.
“I don’t know anybody in business who hires an employee because they’re going to get a tax break,” Mr. Thompson said at a House Ways and Means Committee hearing with Treasury Secretary Timothy F. Geithner. “People hire employees because they have work to do.”
Rep. Lloyd Doggett, Texas Democrat, cited “general consensus among tax experts is that the credit is a stinker because it simply encourages people to do what they would have done anyway.”

The Heritage Foundation’s Curtis Dubay agrees. In his new paper on Obama’s payroll-tax proposal, Dubay observes that a similar plan in the 1970s failed at its goal of net job creation. The gist:

President Obama is proposing, and Congress is considering, a temporary tax credit to encourage businesses to hire new workers. Given that 7.2 million workers that have lost their jobs since the recession began in December 2007, efforts to reduce government-imposed obstacles to hiring are commendable. The proposed tax credit, however, will not create the sustainable jobs needed for long-term recovery and will likely create no jobs on net.
Congress and the President should instead focus on lifting the burden of uncertainty off businesses by dropping their business-threatening agenda and permanently extending the 2001 and 2003 tax cuts.