Start out with a false premise and then cry "Explain this to me like I'm a complete IDIOT because I don't get it."
OK, here's your answer.
Their logic is, if I'm reading guys like Chip Reid correctly, that if you raise taxes on the wealthy and the businesses they run, that will lead to them not hire since they'll supposedly have less capital to work with and they "aren't just gonna EAT it" (a whopper of a fallacy since PROFITS are taxed and EXPENSES are deducted); but if you lower their taxes, that will lead to them to put more into their businesses and create jobs (that is, if you took the monorail to Fantasyland. Reality dictates otherwise).
Simple round numbers for illustration purposes only.
Business makes $10,000 gross income (pre-tax). Expenses (minus payroll) are $2,000. Four employees make $1,000 each. Owner makes $2,000. Taxes are $1,000. Net profit is $1,000.
... if you raise taxes on the wealthy and the businesses they run, that will lead to them not hire since they'll supposedly have less capital to work ...
OK, taxes are raised to $1500.
Business makes $10,000 gross income (pre-tax). Expenses (minus payroll) are $2,000. Four employees make $1,000 each. Owner makes $2,000. Taxes are $1,500. Net profit is $500.
In the example above, you've reduced my "capital to work with" by 50%. That is less money for me to raise wages, or lay out capital expenditures in order to be able to produce more and therefore create increased gross income, which would lead to the need to hire more employees.
... but if you lower their taxes, that will lead to them to put more into their businesses and create jobs ...
OK, taxes are lowered to $500.
Business makes $10,000 gross income (pre-tax). Expenses (minus payroll) are $2,000. Four employees make $1,000 each. Owner makes $2,000. Taxes are $500. Net profit is $1,500.
In the example above, I've increased my "capital to work with" by 50%. That is more money for me to raise wages, or lay out capital expenditures in order to be able to produce more and therefore create increased gross income, which would lead to the need to hire more employees.
There it is, very simple to understand. I guarantee you the HughBeaumont primitive, nor any of his worthless ilk, still won't understand it. Of course, from reading his post, he's so dumb he believes that businesses that have more income, more often than not, don't use that income to either increase wages (to both the owner and the employees) or use it for capital expenditures. Someone like that is too
to try and discuss standard business practices, they've already decided things happen they way they want to believe they do anyway.
This statement....
... they "aren't just gonna EAT it" (a whopper of a fallacy since PROFITS are taxed and EXPENSES are deducted)
... is from someone who has obviously never owned and operated their own business. It the typical mentality of "It didn't really cost anything because it's a business expense," which is nothing less than childish stupidity. There's nothing really more to add to that.
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