Quote:
Originally Posted by puckedoff
You need to keep in mind that capital (ie the money that would be used for expansion in this scenario) competes with all types of returns.
If my options are take risk (and as you say above, expansions don't all go flawlessly) to make a smaller profit, I can decide instead to put that money to work in the stock market, real estate, foreign countries etc. I am not forced to choose to expand and destroy capital despite the Govt's invention of a new tax.
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True, however you also need to keep in mind there is competition in business. If your business won't invest and grow where it can, another company will. If all businesses follow a similar path, eventually you run out of places to expand and businesses will begin to stagnate which would eventually lead to recession, which will have a ripple effect across most of the other investment options you listed.