With regards to large corporations, the tax issue comes in two flavors, what lower taxes would do and what higher taxes would do.
The common argument for reducing taxes for corporations is that it would create jobs. This stems from the assumption that with money, corporations will hire more people to produce more goods to make more money etc... The problem with that line of thought is that it ignores a very important fact of business, having cash on hand is not the reason corporations hire people, the only thing that would cause a company to hire people is demand for product. That's it, they hire people when they think there is sufficient demand to support an expansion of operations, ie, enough demand to buy more product, that's it. The only motivation for doing business, in the private sector at least, is to make money, (I am aware of nonprofits, but they rarely come up as perpetrators of injustices, so I'll excuse them from my arguments here.)
The second half of the argument is that higher taxes would discourage business. I certainly understand that taxes can discourage activities, smoking for instance was brought to my attention. Taxes on tobacco have certainly decreased the number of smokers in the world, I should know, I used to be one of them and a higher price at the counter, although not the primary motivation, certainly helped to discourage me from continuing with the addiction, (of course trying not to die early certainly played a role as well!) But is it fair to compare taxes on business to taxes on tobacco? I hardly think so.
It must be remembered that a corporation is merely a group of people going to work each day. Every one from the Owner, CEO and President, to the factory floor worker, each with their own jobs to do. Each going to work every morning. Would the Owner of the business quit his job if the company he or she owns had to pay higher taxes? I dont think they would. If that logic truely applied, wouldn't the factory floor workers quit their jobs to avoid paying higher taxes? The fact is that the owner's skill set allows them to make 300 times more then they could if they worked for someone else as a wage earner. With higher, fairer taxes, that number might be reduced to only 200 times as much, which in my book is still pretty nice! (My "figures" are purely there to illustrate concepts of motivation!) My point is that people who own and run businesses do so because of all the things in life to do, owning a business is what makes them happy. I have to believe that all things being equal, yes that means taxes, alot of people would still own businesses. If you could keep the remainder of $3,000,000 minus 35% or $40,000 minus 35%, which would you choose?
Of course people should should be in business for themselves, and make millions of dollars, billions if they are REALLY good, but it should be done on a level playing field, with out our government not playing favorites and without civil duties being sherked by some onto others.
The common argument for reducing taxes for corporations is that it would create jobs. This stems from the assumption that with money, corporations will hire more people to produce more goods to make more money etc... The problem with that line of thought is that it ignores a very important fact of business, having cash on hand is not the reason corporations hire people, the only thing that would cause a company to hire people is demand for product. That's it, they hire people when they think there is sufficient demand to support an expansion of operations, ie, enough demand to buy more product, that's it. The only motivation for doing business, in the private sector at least, is to make money, (I am aware of nonprofits, but they rarely come up as perpetrators of injustices, so I'll excuse them from my arguments here.)
The second half of the argument is that higher taxes would discourage business. I certainly understand that taxes can discourage activities, smoking for instance was brought to my attention. Taxes on tobacco have certainly decreased the number of smokers in the world, I should know, I used to be one of them and a higher price at the counter, although not the primary motivation, certainly helped to discourage me from continuing with the addiction, (of course trying not to die early certainly played a role as well!) But is it fair to compare taxes on business to taxes on tobacco? I hardly think so.
It must be remembered that a corporation is merely a group of people going to work each day. Every one from the Owner, CEO and President, to the factory floor worker, each with their own jobs to do. Each going to work every morning. Would the Owner of the business quit his job if the company he or she owns had to pay higher taxes? I dont think they would. If that logic truely applied, wouldn't the factory floor workers quit their jobs to avoid paying higher taxes? The fact is that the owner's skill set allows them to make 300 times more then they could if they worked for someone else as a wage earner. With higher, fairer taxes, that number might be reduced to only 200 times as much, which in my book is still pretty nice! (My "figures" are purely there to illustrate concepts of motivation!) My point is that people who own and run businesses do so because of all the things in life to do, owning a business is what makes them happy. I have to believe that all things being equal, yes that means taxes, alot of people would still own businesses. If you could keep the remainder of $3,000,000 minus 35% or $40,000 minus 35%, which would you choose?
Of course people should should be in business for themselves, and make millions of dollars, billions if they are REALLY good, but it should be done on a level playing field, with out our government not playing favorites and without civil duties being sherked by some onto others.
Comments
Higher taxes do not necesarily discourage business. They do however remove funds available to invest in business. Higer taxes reduce the supply and also reduce the demand because with less money in free market circulation there is less money to buy goods and services.
The company owner would not quit his job with higher taxes, you are correct. However, he will have less money to hire additional employees, he is not going to take a larger tax burden and not try to recoup that cost in some way. Reducing wages, bonuses, and hiring freezes is how that money is recouped. Or they elliminate costs that are unnecessary such as chartering leer jets.
The part I like most about your post was in the middle of a sentence "with out our government". You should have stopped there. Government does not create wealth they simply waste and abuse it, the farther we can keep them from the everyday operations of this country, and our pocket books, the better off we will all be.