[quote=SK in CV][quote=AN]Anyways, like I told dumbrenter earlier, my anecdotal examples isn’t meant to prove that there’s a causation between increasing taxes and reducing wage, which would lead to decreasing demand and GDP. Maybe the majority of the businesses don’t do this. I don’t have data to prove one way or another. However, it’s meant to disprove SK’s statement that higher marginal tax is stimulative. There’s no data on the mass scale to prove that and I gave anecdotal example that disprove it. The data he did provide show no real clear correlation much less causation of increasing top rate is stimulative.[/quote]

Just to be clear, that wasn’t what I said. What I said was that higher top rates (>50%) on high income is stimulative for business. It doesn’t apply in those lower income brackets where your friend’s business fits. We’re talking about taxable income level of $250K. Thats total net business income of probably at least $280K a year, often more than $300K a year. That’s rarely the kind of business where the spouse will come in and pick up a few more work hours so that they can make ends meet.[/quote]
I still haven’t seen convincing data to prove this as well. The only data you’ve provided actually disprove your statement that top rate >50% on high income is stimulative for business (I assume when you gave your data, you’re trying to say increase GDP = stimulative). I’ll say it again, with your data, when we have 37.5-42.4% top marginal rate, we have higher GDP growth than when it was 42.5-62.4%. So, even if you disregard my anecdotal example, your data alone disproves your statement.

FYI, their business is not their only sources of income. Good cash flowing investment properties is another. So, yes, I have no doubt their combined income is over $250k. The business itself might not be over $250k net profit (I don’t know for sure).