In my opinion is it making no sense.

Tax means that you have to work so that the inefficient state can keep bad runned companys, expensive wars.

In m opinion should governments reduce tax with a fixed % a year and without increasing the state debt.

We enterpeneurs should be free for working for the state in this difficult economic times.

posted 8 months ago

Businesses do generally, and in a fairly predicatable way when everything else is fairly constant, but we are in an exceptional set of circumstances, and the response is completely uncertain.

One thing we can say is that the problems facing most business is so large that the tax changes are a relatively minor factor, and therefore any negative impact will be minor.

The question also seems to assume that the only reason for setting taxes is what response the business comunity will have - if that was the case then taxes would be set at effectively 0.

Tax income is needed, now as much as ever, with massive deficits, getting worse as the economy shrinks, and more demands on the government coffers. Adding to tax might drive a few marginal companies out of business that might have hung on otherwise, but the extra revenue generated from those that are still fundamentally sound will be worth it.

posted 8 months ago

Historically business has reacted positively every time across the board tax cuts have been implemented, under Kennedy, Reagan, and Bush 43. This would seem to hold true so long as we are below levels of full employment. As rates are cut, investment money is loosened up, and jobs are created via these new investments. So long as there are workers available to fill those jobs, the tax base increases, more than offsetting the tax rate decrease. The result is that revenue increases.

So the answer of course is to cut taxes to stimulate the economy. The conservative approach. It has a 100% historical success rate.

Taken to the logical conclusion, the correct plan would eliminate income tax altogether, as taxing productive behavior is stupid public policy on it's face, and switch instead to a consumption tax which punishes people for what they remove from the ecnomy, not what they choose to add to it. If the consumption tax is a one time tax paid on end-use consumption only, ie NOT a value added tax, the result is that the ~23% embedded taxation that exists in the average price of goods and services in the US drops to the bottom line and becomes profit. In a competitive environment this excess new-found profit is shared with the consumer, up to it's full 23% in the form of competitive price wars. Prices drop. Profit increases or remains the same. US companies become dramatically more competitive in a worldwide environment, and that whooshing sound you hear is investment dollars rushing back into the market to take advantage.

It's amazing the kind of economic engine we could have if we simply stopped using taxes to satisfy our envy, buy votes, and punish productive workers. But as long as it's about "fairness", we'll lumber along being much less than we can be.

posted 8 months ago

If the real end state at all of this is to stimulate the economy and restore jobs - a significant cut (even a tax holiday for several months) in business taxes seems a no-brainer.

What really happened was that Congress used the recession as an opportunity to fund their agenda - hoping that economic stimulous would also result.

I fear the true outcome is that they've p%^&*d away billions and billions, have little job creation to show for it, but have funded a legacy of social programs it will be hard to undo.

posted 8 months ago

First, it is the Democratic party, not "democrat". It is also capitalized.

If taxes are cut for the right groups, everyone will benefit. Cut taxes for the consumer class and they will buy more of the producer's products. Simple. If that consumer class has lost their jobs, then we can't cut taxes on zero income. So, extend unemployment benefits and food stamp programs to keep them consuming.

We've just cut taxes for 95% of the populace. Why does everyone think that the government is raising taxes? Obama has not enacted one piece of legislation to raise taxes on individuals or small businesses. There are tax cuts that are going to expire as legislatively mandated in 2010, so I guess this is what everyone considers "raising taxes"?

posted 8 months ago

We've just cut taxes for 95% of the populace??? Gee I have not seen a tax cut. My pay check is the same and I am far from rich - smack in the middle of the middle class. So, who got the tax cut???

And tax cuts for those making over 250K are being revoked - so the reality is that it is a tax increase. It makes no sense to raise taxes or revoke tax cuts if you want economic growth.

Businesses are very sensitive to tax increases and decreases.

posted 8 months ago

I'm fine with taxes as long as someone else is paying them. I'm just kidding, but that seems to be what Democrats are always saying. From Geitner to Dodd to Rangel....even Hollwood recognizes the Business Value of lower taxes, making location decisions based in large part on tax breaks and credits.

The notion that Obama has not raised taxes yet is absurd. He signed into law a 67 cent per pack, cigarette tax and his Carbon Cap and Trade nonsense will cost American consumers in higher energy bills. Ending the program allowing for Mexican Trucks to drive through the border and make deliveries (part of the Stimulus Bill) has caused Mexico to add tariffs to millions of American Exports and may spark a broader trade war. If the Democrat's plans for "card check" passes the result will be additional costs for business that will be passed on to consumers.

I think the president has made it clear, he believes that many people have not been paying their "fair" share and he's going to do something about it. Higher taxes, whether through an expiration of existing rates or new taxes, either direct taxation or increased reglatory costs, will cost everyone in this country. A bad plan at a bad time....just ask Hollywood.

posted 8 months ago

How does it serve anyone to raise taxes in order to combat an economic downturn..? Less tax money in the hands of government, be it local, state or federal, means that they must cut back on the services they are providing (or make cuts to their spending in other ways).

So here I am, either out of work or forced to take a pay cut to keep my job (since fewer people are purchasing my employer's product/service because they, too, have less money to spend), and you want government to take MORE of my money?

How on Earth does that make sense???

Out here in the real world, retailers are LOWERING PRICES to attract consumers who have LESS MONEY to spend. So you're suggesting that government do the opposite?

"If a tax is levied on a corporation, and if it is to survive, it must raise the price of its product, or lower dividends or lay off workers. In each case, it is people, not some legal fiction called a corporation, who bear the burden of any tax levied on the corporation. An important subject area in economics called tax incidence says that the entity upon whom a tax is levied does not necessarily bear the burden of the tax. Some of the tax burden can be shifted to another party. That's precisely what corporations do and as such they are merely government tax collectors." .. Dr Walter Williams

posted 8 months ago

They know that any tax cuts in year one of Obama will be increases in years two, three and four. These are not tax cuts. They are coerced high interest loans in bad faith that would make Al Capone blush in shame.

posted 8 months ago