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Old 02-05-2009, 02:37 PM  
Phil21
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Join Date: May 2001
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Posts: 993
In my view.. "it depends" like pretty much everything else in this world.

While you are correct - businesses hire with pre-tax dollars, you don't actually delve into the tax code to see how this "really" works.

For example, our business is extremely capital intensive - we have to buy servers weekly, or we will slowly go out of business. In this manner, much of our "capital" expenditures really *should* be classified as an operating expense. Unfortunately, the tax code does not agree

Thus, we are taxed on "phantom" income - income that is simply not there, since we had to spend it on new equipment to upgrade customers on older stuff/etc.

So.. in our case where we are putting almost every dollar in profit right back into growing the company - a lower tax rate on capital expenses would directly equate to more jobs. Not many, of course - but having an extra few hundred thousand a year or whatnot either means we can hire more staff, or more likely buy more equipment to get more customers, which then requires more staff to support.

So.. I agree with both sides. Cutting business taxes may not directly equate to job growth in many businesses, but it can in others. It also very much depends on what *kind* of tax cuts you are proposing as well.

-Phil
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