[quote=CA renter]That’s exactly it, dumbrenter. The notion that people won’t hire or expand because of higher taxes is pure BS, and there is no historical evidence to show that higher taxes cause businesses to shrink/not expand. If anything, in the presence of adequate demand, higher marginal tax rates can be somewhat stimulative, as discussed above.
The only reason people don’t hire/expand is because the demand isn’t there to justify it (or they like to keep things small just for personal reasons).[/quote]
Who’s saying anything about hiring right now. We’re talking about not reducing employee’s pay or hours. That’s totally different than hiring. You’re right that when business is expanding, they’ll absorb the higher taxes. However, that doesn’t mean they’ll do the same during a declining demand.
I still haven’t seen proof that higher marginal tax rates is stimulative. All I saw is, during period of growth, increasing taxes didn’t affect growth. Two totally different point and I’ve been trying to point out that correlation does not equal causation many times in this thread.
You’re right, the only reason people don’t hire/expand is because the demand isn’t there to justify it. So, income comes from demand, income – expense = net income. If income stay the same, if you increase expense through increase taxes, what make you think the business owner won’t decrease their other expense (worker’s hours/pay) to maintain the same net income?
