If you'd tax me more, I'd hire more people - as a small business owner

(and the same would apply to any major corporation) if my taxes were raised by a sufficient amount, then I may as well hire more people to do more of the stuff around the office.

If my taxes were raised $30,000 a year (not very likely in my income bracket, but just for an example) then I won't have the money in my pocket. I may as well make my life easier (and save some money) by hiring someone for that money and have them do more work that I could make money off off. Additionally, since the $30K is now deductible from my income, I may actually wind up paying less in taxes since they're based on the profit the business earns. And if all the wealthy are hiring, more people have more money to buy more of whatever product I make.

It's the simple reason that employment goes up in higher tax periods and drops every time we give the "job creators" tax cuts. Even my grandmother gets this concept, and she worked at home her whole life. But somehow these brilliant economists consistently can't get their heads around it.

;)

in a digestible and relatable form.

Thank you! I wish this would get a 100 thousand recs.

and you hired somebody at a total cost of 30k, that hiring them would offset the entirety of your tax increase?

How would that work?

If my taxes go up $30k, let's assume that it's on a net profit of $200k. 15% more of my net paid in taxes. But if I hire somebody at 30k, my taxes only go down by 30k x 0.15, or $4.5k.

In fact, until you're at a 100% tax rate for the portion of income you'd be putting towards a new employee, you may spend a smaller percentage of your profit on the new employee but you're not going to break even unless that person brings in at least his pay in net income.

On the other hand, if you're making $60k and have to pay an additional $30k--we're not near the 100% tax rate, but close--you're very likely to just close up shop.

You're right, you did get that effect. If there's already a reason to hire a new person, a higher tax rate will make that person "cheaper"; but for what you're saying, to make that person effectively "free," you need a confiscatory tax rate. At that point the difference between investing the money in equipment, paying it in dividends, or just giving pay raises (or hiring a better quality of staff) are just as alluring.

by 30K..... yes, I was trying to say it simply without tons of complicated examples and all - As democrats should have learned by now, the general public doesn't 'get' nuance or heavy thinking very well - especially when you mention taxes. I'm still amazed at the number of people who say "I didn't pay anything in taxes, I got money back" but never make the connection that they got a $300 refund check from $1,000 in deductions.

This is exactly why the highest rates were nearing confiscatory - go back and look at Eisenhour time frame. As long as I have a business incentive to spend that money to grow my business and not pay it out in taxes I will. If the tax rates are so low that I can take the cash out of the business and buy myself toys, I will (not me, I'd feed homeless people rather than buying a yacht)

All these so called conservatives bemoan how much better life was in the 50's & early 60's - but they damn sure do everything in their power to keep us from bringing back the tax rates that made that standard of living possible for so many families

--other public goods. The people who got hired would then be able to become your customers again.

You mean the actual employees may be able to afford the products they are making?!

People only hire if they will make more money when they add people.

Econ 101 would be your friend.

someone to either make my life easier as an employer or add to the business bottom line - then any business owner is going to spend the money on adding someone

It's all in how the tax codes are written, especially the ones now that don't disfavor companies adding workers over seas

Econ 101 - you'd get an F, Civics a D-

There is absolutely nothing stopping you from paying whatever additional amount of taxes that you wish. You can even specifically write a check to pay down the deficit - just make it out to the Bureau of the Public Debt. There is nothing stopping you from over paying, in fact you have several options to do so.

to customers, then the fact that more people are employed and making enough money to purchase goods and services means that business will probably improve. Also, with more revenue, the government could improve infrastructure. Besides, if the government borrows less to meet its obligations, then interest rates go down.

And if more people can make an honest living, then those people, too, end up paying taxes rather than relying on the social safety net (what is left of it), so that simultaneously increases government revenue and reduces government expenditures as well.

Furthermore, with more people able to make a decent living honestly, crime goes down, which shows up in all sorts of ways in savings for businesses, not to mention just making life in this society more pleasant all around.

Win-win-win-win-win-win-win. . . .

But the real problem is related to the tragedy of the commons. The wealthy and powerful think only in the short-term, so all they care about is paying less in taxes right now, not in the long-term benefits to paying their fair share (benefits for themselves, for others, and for society as a whole).

One other major factor, of course, is embodied in the statement by the corrupt businessman villain (played by Robert Culp) in Superman III: "It is not enough that I win--everyone else must lose!"