Originally Posted by crockett

You seem to not understand how things worked in business prior to Bush era tax cuts.

I'll try to make it simple because I grew up around a pretty successful small business that employed well over 100 people during the Clinton era when higher taxes were paid.

The simple fact is we likely didn't pay any more taxes under Clinton than with Bush. The reason for this is the same reason people get federal parole tax returns at the end of the year. It's called tax credits.

The basic idea is if you have no deductions, you pay the full tax percentage. Of course that means smart and successful business will do their best to have as much tax credit as possible.

What do you do to get those tax credits? Well quite simply it usually means you re-invest part of your profits back into your business. This means buying new equipment, hiring more labor or simply donating to non profit origination if you wish.

This is why you get job growth & a economy boost by paying higher taxes. To use a GFY meme "the money is in motion". This is what creates jobs because companies add labor, they buy machinery & equipment which creates jobs for the people whom built it.. ect..ect..

Of course it's a balance act and there isn't a indefinite return as to making higher & higher taxes to create jobs & economic growth but it was probably pretty close to being just right under Clinton.

Meanwhile enter the Bush tax cut era and less tax credits are needed which means less money was reinvested back into businesses because instead they could pull that money out as profits. This means less jobs are created because the money is no longer in motion and it gets carted away to some off shore tax haven or where ever money goes these days.


Simply put, just because the tax rate is higher doesn't mean you actually pay higher taxes. It just means the money instead of being taken out as profits is reinvested causing growth.