3 ms·

If taxes were 100% what would happen? Businesses would turn into non-profit slaves. It may not be linear but suggesting higher taxes have no impact on hiring or

If taxes were 100% what would happen? Businesses would turn into non-profit slaves. It may not be linear but suggesting higher taxes have no impact on hiring or wage growth is naive. I personally have a guarantee for 400k on a line of credit, 20+ employees and when we have low profit years I ask if its even worth it. I can make close to the same as an independent consultant and have a lot less to worry about. Yes, taxes are on profits, but you simply don't hire when profits are low. You try to extract more from what you have and utilize contractors to fill in. > either an employee creates more profit than they cost or they do not Some employees are necessary to run the business and are not on the revenue side. When profit is low you try not to hire non-revenue employees and you might let some go. Business owners are in it to make money. If the government takes more of the profits - there's both less cash available in the bank to reinvest after you cover your liability and there's less incentive to run a business. Nobody gets any salary bumps when profit is low. Our problem is not employment but lack of any wage growth, esp. as debt and expenses like housing and education have skyrocketed. > Millions of those 23M business tax returns do not represent a "business" in the sense of an entity that would or could support hiring of an employee - it's not that type of business nor trying to be But millions do. Also - "not trying to hire" is also partially based in the unfriendliness that comes along with running small business with employees. > 80% of businesses are one person businesses? Feels high, no? What percentage of people living around you are in this group? That 80% is of small businesses, not all businesses. But no it doesn't feel high. And it doesn't say one person businesses. An LLC can have several members but no employees. That number doesn't feel off to me. We're talking about real estate agents, plumbers, electricians, carpenters, hairdressers, barbers, interior designers, independent software engineers and other technical consultants, etc. Each occupation has 200-600k people. You're downplaying the 23M, but can you agree there's millions to activate? We also don't need to activate them to hire full-time. If they hire part-time that's a huge win too. Many of these businesses have a lot of apprenticeship to offer and are jobs that are rewarding because you accomplish something every day. I know countless people and small partnerships making 150k-1M that have no employees. This includes blue and white collar occupations. When I talk with them about expanding their business and hiring - they're mostly just scared of making that commitment because they think it will be too much of a headache. And it is a headache and a lot of risk. Some states are worse than others.

hxta98596 9y ago
I found this comment unfortunate, I'd prefer not to debate like this. I wish you a lot of success with your business, I'm rooting for you, and us, and all small businesses. Some websites I use to check facts and numbers: https://www.census.gov/en.html https://www.census.gov/en.html https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtm... https://fred.stlouisfed.org/ https://fred.stlouisfed.org/ https://www.bls.gov/ https://www.bls.gov/
- exclusiv 9y ago
  I'm familiar with most of those resources. Do any of them support your claim that tax levels make no impact on hiring or wage growth? Separately, since we're exchanging data source recommendations, I'd also suggest looking at non-government provided data sources when researching things like the impact of higher taxes. :) Ask any business owner how doubling taxes would affect their decisions on hiring, providing bonuses or bumping their employees salaries after they wrap up their fiscal year with lower net profit and less cash available in the bank. You made general statements like "relatively few are (real businesses)" when the latest SBA report shows 5.8 M with employees. Regardless of how many are real businesses or not, 63% of net new jobs came from them. Your Pew study says "The likelihood that a self-employed worker will hire other workers has diminished over time" which supports my case that it's become less attractive to hire and we should enact policies to incentivize new hires because we're losing a good source of new jobs. I'm not disputing that the majority of the ~20M nonemployers aren't likely to hire, but we're still talking about millions we can activate that have never hired and 5.8 M that could make more hires with the right policies. You disputed the fact that 80% of ALL businesses had no employees. The SBA report states that small businesses comprise of 99.9% of all firms so yes your slight misquote is effectively true - 80% of businesses are nonemployers. I laid out a bunch of occupations each with a range of numbers. For just one occupation, electricians - there are 628,800 (https://www.bls.gov/ooh/construction-and-extraction/electricians.htm https://www.bls.gov/ooh/construction-and-extraction/electric...) Carpenters = 945,400. Not all are registered businesses of course but there's a meaningful chunk that could hire either full time or part time. Anyway - I have no reason to doubt that 80% of small/all businesses counted by the SBA have no employees. That's about 23M people, excluding those small businesses with partners and no employees. Completely believable. There are a few things preventing the capable nonemployers from hiring: "Two of the business characteristics that correlated with an increased likelihood of hiring a first employee were the availability of assets and incorporation." [1] Assets go down with higher taxes. "Non-employers who received entrepreneurial training were more likely to add a first employee than those who did not." [1]. Small sample size but makes sense. Most nonemployers try to do everything and need to understand how to offload low value tasks so they can focus on high value tasks to grow their business. Regarding tax implications, here's just one study from The Hartford: "If taxes rise further, the majority (66 percent) of small-business owners plan to deal with it by passing the added costs on to their customers. More than half (58 percent) will postpone plans to expand their businesses, 55 percent will cut back on personal investments in their companies and 54 percent will institute a hiring freeze. Just 28 percent plan to cut back on existing staff." [2] From the 2015 study - "small business owners are most concerned that healthcare reform and tax reform will impact the cost of running their business." [3] and 37% say taxes present a major risk to their business. [1] https://www.sba.gov/content/crossing-employer-threshold-determinants-firms-hiring-their-first-employee https://www.sba.gov/content/crossing-employer-threshold-dete... [2] https://www.americanexpress.com/us/small-business/openforum/articles/how-would-tax-increases-affect-your-small-business/ https://www.americanexpress.com/us/small-business/openforum/... (2012) [3] https://www.thehartford.com/sites/the_hartford/files/executive-summary-2015-sbss.pdf https://www.thehartford.com/sites/the_hartford/files/executi... (2015)

hxta98596 9y ago

I found this comment unfortunate, I'd prefer not to debate like this. I wish you a lot of success with your business, I'm rooting for you, and us, and all small businesses. Some websites I use to check facts and numbers: https://www.census.gov/en.html https://www.census.gov/en.html https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtm... https://fred.stlouisfed.org/ https://fred.stlouisfed.org/ https://www.bls.gov/ https://www.bls.gov/

exclusiv 9y ago
I'm familiar with most of those resources. Do any of them support your claim that tax levels make no impact on hiring or wage growth? Separately, since we're exchanging data source recommendations, I'd also suggest looking at non-government provided data sources when researching things like the impact of higher taxes. :) Ask any business owner how doubling taxes would affect their decisions on hiring, providing bonuses or bumping their employees salaries after they wrap up their fiscal year with lower net profit and less cash available in the bank. You made general statements like "relatively few are (real businesses)" when the latest SBA report shows 5.8 M with employees. Regardless of how many are real businesses or not, 63% of net new jobs came from them. Your Pew study says "The likelihood that a self-employed worker will hire other workers has diminished over time" which supports my case that it's become less attractive to hire and we should enact policies to incentivize new hires because we're losing a good source of new jobs. I'm not disputing that the majority of the ~20M nonemployers aren't likely to hire, but we're still talking about millions we can activate that have never hired and 5.8 M that could make more hires with the right policies. You disputed the fact that 80% of ALL businesses had no employees. The SBA report states that small businesses comprise of 99.9% of all firms so yes your slight misquote is effectively true - 80% of businesses are nonemployers. I laid out a bunch of occupations each with a range of numbers. For just one occupation, electricians - there are 628,800 (https://www.bls.gov/ooh/construction-and-extraction/electricians.htm https://www.bls.gov/ooh/construction-and-extraction/electric...) Carpenters = 945,400. Not all are registered businesses of course but there's a meaningful chunk that could hire either full time or part time. Anyway - I have no reason to doubt that 80% of small/all businesses counted by the SBA have no employees. That's about 23M people, excluding those small businesses with partners and no employees. Completely believable. There are a few things preventing the capable nonemployers from hiring: "Two of the business characteristics that correlated with an increased likelihood of hiring a first employee were the availability of assets and incorporation." [1] Assets go down with higher taxes. "Non-employers who received entrepreneurial training were more likely to add a first employee than those who did not." [1]. Small sample size but makes sense. Most nonemployers try to do everything and need to understand how to offload low value tasks so they can focus on high value tasks to grow their business. Regarding tax implications, here's just one study from The Hartford: "If taxes rise further, the majority (66 percent) of small-business owners plan to deal with it by passing the added costs on to their customers. More than half (58 percent) will postpone plans to expand their businesses, 55 percent will cut back on personal investments in their companies and 54 percent will institute a hiring freeze. Just 28 percent plan to cut back on existing staff." [2] From the 2015 study - "small business owners are most concerned that healthcare reform and tax reform will impact the cost of running their business." [3] and 37% say taxes present a major risk to their business. [1] https://www.sba.gov/content/crossing-employer-threshold-determinants-firms-hiring-their-first-employee https://www.sba.gov/content/crossing-employer-threshold-dete... [2] https://www.americanexpress.com/us/small-business/openforum/articles/how-would-tax-increases-affect-your-small-business/ https://www.americanexpress.com/us/small-business/openforum/... (2012) [3] https://www.thehartford.com/sites/the_hartford/files/executive-summary-2015-sbss.pdf https://www.thehartford.com/sites/the_hartford/files/executi... (2015)