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Originally posted by mikejohnson2006
The Rich keep money/wealth in their Company and create Jobs to avoid higher personal income where is the evidence that this works ? What I mean is if the Business Owner is making less Income a smaller paycheck would he have any Incentive to hire new Workers and or is this claim that higher taxes creates Jobs nonsense because not every Business Owner is going to hire to avoid higher taxes thank you ?
Yes, the company reinvests, but the most value they get from reinvestment isn't necessarily in jobs. Hence why they said most of it goes to new equipment. Since the company can choose how to fritter away the profits that the company makes, and their best interest isn't in hiring more pay checks, and it's not a good idea to let your less astute investors know that you keep x employees instead of giving them the money, just to avoid taxes? There's a lot that goes on in this field.
Originally posted by xxcalbier
Accutly hes right now why didnt I think of that?
Its works like this with high taxes . Your business is taxed on how much the NET not gross profit is for the year .
So if you want to avoid the higher taxes you do this by simply reinvesting all the profit into your business.
Now because the money is being used to grow your business its no longer considered a profit .And can no longer be taxed . Wile if taxes are low well heck A nice sking trip or boat or maybe my own jet ? humm what should i but with all my money now that I dont have to reinvest it to keep from paying taxes?
so Higher taxes would cause job grouth as company reinvest the profit to show no profit so as to avoid taxes .
Its always worked that way as a matter of fact capital gains tax can be gotten around in such a manner .KEY word is GAIN reinvest in more property there is NO official gain.even though you are making tons of money.