"John R. Carroll" wrote in message
...
Buerste wrote:
"Ignoramus16938" wrote in
message ...
On 2009-10-03, Buerste wrote:

"Ignoramus16474" wrote in
message ...
Some people seem to believe that with more taxes, people will tend
to work less and businesses will hire less.

This view is, at best, simplistic, and at worst, less than sincere.

I would like to point out that it is much more complicated than
that and effects of taxation, outside of extremes like 100% taxes,
are not nearly as obvious.

Here's an example.

... example snipped...


From a different point of view, consider the effect of taxing the
business
that provides that $100/hr job. Can the business expend capital
(risk) to
expand and hire more $100 workers? Or, buy new equipment built by
companies
that hire other $100/hr workers? With more capital going into the
bottomless pit of government, there is less capital available to
hire people
and buy equipment. Less money in the whole system means less
presents for
mistresses, less demand for all sorts of goods which leads to less
production and less jobs.

That's a good question and it took me a couple of days to think about
it.

The standard approach here is to say that any taxes on businesses
that are in a competitive industry, in the long run, are borne by
their customers, by way of paying a higher price for goods.

If we assume that a certain degree of business risk would demand a
certain amount of return on capital, the above makes sense.

In my little world, my accounts are in great shape, I'm lucky enough
to be almost recession proof. BUT, I'm not risking ANYTHING! The
standing order is not to buy anything we don't absolutely have to
have and watch every penny. No landscaping projects, no new
lunchroom furniture, no new computers, no luxuries!

These are uncertain times, the health care fiasco, the cap-n-tax
scam, and the massive spending of this administration frighten the
hell out of me...why should I risk? I will just hunker down and
wait for the end of this administration. And, if I don't risk, the
landscapers, computer makers, furniture makers and luxury makers LAY
PEOPLE OFF!!! It's not just me, it's most small business owners in
general feel the same way. No mater what the liberals say, it won't
change this. PLEASE, TELL ME YOU GET IT!

I do get it. But I think that you are overstating effects on changes
in tax rates on your business. Also, and more specifically to the
issue of alternatives to higher taxes, the effects of inflation are
more deleterious in many respects, and create even more business
uncertainty, than higher taxes.

i

I can't raise prices, I have year-long contract and I have to compete
with foreign competitors that don't have these taxes and other
bureaucratic expenses. It's true that other businesses can just pass
these costs on, but I can't.

Sure you can Tom.
Once a year.


--
John R. Carroll



The batteries in my crystal ball are weak.