There’s a common misperception that all businesses in the U.S. are struggling. Many are, but if you’ve been paying much attention to business media recently, you know that many large corporations in the country are reporting record profits. Intel, Hewlett-Packard, Pepsico, and JPMorgan Chase are just a few of the companies that have announced record earnings this year. Far from struggling in the recession still crushing the middle-class and most working Americans, these firms are reported to be sitting on unprecedented levels of cash.

With record levels of cash on hand, why aren’t more private sector jobs being created?

Why aren’t more companies following the example of Google, which this week announced a joint venture with three other firms to finance a massive wind energy project and underwater transmission grid that will provide electricity to 1.9 million homes on the East Coast? Google’s investment, named the Atlantic Wind Connection, will create jobs, produce alternative energy and move our country forward from its third-place position as a leader in renewable energy.

One reason is that many companies are using their cash on hand to buy up shares of their own stock. So far this year, according to market research, firms have announced they will spend $275 billion to purchase shares of their stock, a five-fold increase over this time last year. Although using cash to purchase stock shares doesn’t create jobs or new products, it does return profit to investors by increasing the value of their stock and ensures profits are subject to the low 15 percent tax rate on capital gains.

Another reason jobs aren’t being created is that mega corporations with cash on hand are continuing to outsource jobs overseas, in spite of he nation’s 9.6 percent unemployment rate. For the six-month period ending Sept. 30, mandatory filings with the federal government from companies moving operations overseas have increased 20 percent over the same period last year. That six-month figure represents workers at 1,200 offices and plants nationwide.

Hewlett-Packard, for instance, not only chose to spend $10 billion on buying back its stock shares, it has announced it will close operations in 10 states, including California, and transfer those jobs to Panama. The Hilton hotel chain is moving its reservations center from California to the Philippines; JP Morgan Chase is moving its telephone banking operations from Michigan to the Philippines, and PricewaterhouseCoopers transferred some of its mid-level client services positions to Uruguay. Yet legislation that would have ended the current tax breaks for companies that ship jobs overseas was killed in the U.S. Senate earlier this year.

What will it take to encourage businesses flush with record profits to invest in long-term growth and help create jobs in the U.S.?

One answer is to repeal the current job-killing tax credit for companies that ship jobs overseas, an idea that has overstayed its welcome. Some argue loudly for deeper business tax cuts, claiming tax cuts alone will create jobs. But across-the-board tax cuts for business too often add billions to CEO and upper managements’ bank accounts and produce no economic growth. The right way to kick-start our economy is to provide targeted tax credits for businesses that invest in their workers, expand operations, modernize or build new plants in the U.S. and help restore the country’s diminishing manufacturing base.

Every new tax cut adds to our nation’s deficit and debt. It’s time to target tax credits to produce incentives that are in the best interest of business and the nation as a whole. Maybe then more businesses will step up, like Google, and undertake investments that produce long-term growth and feed the country’s economic engines with new jobs and new products.