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It's not the additional tax revenue that becomes the benefit. If anything above X amount gets eaten by tax, then it makes sense to increases business spending
by itchyouch 8y ago
It's not the additional tax revenue that becomes the benefit. If anything above X amount gets eaten by tax, then it makes sense to increases business spending by:
- reinvesting into the business (cascades to more economic activity)
- paying for more employee benefits
- increasing employee compensation
- the cascading economic activity provides even more people with opportunities to make more money. virtuous effects.
- gok 8y agoIt sounds like you're talking about things that would be affected by a corporate tax rate, not a personal tax rate, which GP was talking about?
- itchyouch 8y agoMany small businesses use flow through taxation, so they don’t pay both corporate and personal tax. S corps and LLCs. Even if the personal tax was capped at 5M, it then doesnt make sense for personal distributions greater than 5m, so the money stays in the corporation for reinvestment.