anyone that has ever run a small business know how taxation and regulation make it much harder to hire new employees.  sure, monetarily, but also in terms of simple time and increased risk (lack of ability to make truly binding employment contracts).  you discourage things by taxing them, you encourage things by subsidizing them.  if you reduce taxation on new employment (such as, say, waiving payroll taxes for the first 3 months of employment) it will increase the ability of employers on the margin to hire.