Quote:
Originally Posted by Enoch Root
The goal, for the owners of any corporation, is to earn a profit, net of taxes.
If you raise taxes, they need to raise prices to compensate (or have reduced earnings). Keep raising taxes, and they are forced to raise prices beyond being competitive, or not make any net profit.
Either way, you've taxed them out of existence.
The best you could hope for is that you've created hyper inflation.
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I'm gathering that your argument is that they could take their investment elsewhere and make more money? Because for an owner operator, their salary wouldn't count as profits, so we are exclusively talking about capitals gains from investments.
All things being equal in tax policy this should effect the profitability of any investment equally, meaning it does not change what is / isn't a good place to invest your money. That goes back to my argument about tax complexity giving large corporations implicit advantages, by having a higher level of expertise dedicated to tax avoidance. Lowering taxes doesn't really change that problem. Lower corporate taxes to help small businesses fend off the steady march of mega corporations is like using a hammer to fix a chip in your windshield. Because profits are required to pay business tax, the tax doesn't effect anyone except the end consumer as long as there is a level playing field. Obviously you don't want to tax corporations to the point that they can't pass their costs onto customers, but the real problem is not every corporation is passing on the same costs.