Rshermr
VIP Member
[/QUOTE]. Taxes cannot be a crushing burden
most businesses are pass through entities so the tax comes right out of the owners profits and salary. The higher the tax the less he has to grow his business and increase employment
because they are always after salaries and expenses. If the company makes no earnings, not excess revenues after expenses and salaries, they pay no taxes. The only way the company is going to get crushed is if 1) they are stupid enough to price below costs or 2) no one wants there product. If they price at costs, they pay no taxes because they have no earnings before taxes. If they price above cost and make sales, then they have profits regardless of the taxes. Taxes are not 100%.
The problem is, they can't do the math. They can't do business accounting.
Wrong again. Once more, the simple truth.
Some, not most, companies pay pass through taxes.
Taxes are paid on profit. No profit, no tax. So, let's assume that a company makes $500K in profit, and there are 5 shareholders. Then each makes $100K. And pays their normal tax, at the $100K level. Since the tax code is progressive, each pays at a lower rate than if the the tax was on the total (in this case $500K) profit. Which is exactly why some companies, LLC's (Limited Liability Corporations) or Partnerships, choose this method of paying taxes. Typically they are smaller companies.
Relative to your simplistic statement that they are therefor not able to finance growth:
If a company is profitable, they can finance growth by selling stock or taking a loan. As long as there is demand for what they want to produce, they will do so. If there is not sufficient demand, they will not. Now the problem. Businesses are doing really well, overall. A look at the gains in the stock market over the past 2-3 years shows that. However, as long as unemployment is high, they can work their employees harder, put off hiring, and increase their profits that much more. Always happens after a major recession.
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