It's not the additional hire that gets in the way.  Taxes represent additional costs.  Even trying to maintain a current level the tax has to come from somewhere.  Those with the money invested (be it an individual or shareholders) require a certain return on their investment or the money goes somewhere else.  There is a point where if the risk is too high it's not worth the return.  In order to mitigate that, companies need to make a certain amount of profit to justify the risk of capital.  So in order to maintain the return in a situation of added cost (whatever it is, whether it's gasoline or taxes or raw material), you have two choices:  1) raise your prices and/or 2) cut your costs.  You can't generally raise prices more than your competitor, so that avenue is limited.  It's usually a combination of those two things.

If you choose to reduce your profit margin, there comes a time when it's a better risk to put your money in a bank than to risk it in trying to grow a business. 

This thread has obviously diverged wildly from where it started, but oh well....

They are already taxed at 36%.  39.6% is the rate they wanted to go to. It's a $36 difference.  My bad.

1000 *36% = $360
1000 *39.6% = $396
$396-$360=$36

That isn't taxes

Taxes are a cost associated with doing business.   Raising taxes raises costs.    Businesses don't like cost raised unless revenue is raised. 

The point was raising taxes prevent businesses from hiring.  You are not going to hire someone unless it is going to increase your revenue.  The idea that you need to hire someone but can't because taxes are now higher is false.

You do realize that the "only $36" you're talking about also applies to every $1000 you've already made, right?   Just ballparking but that's the first 29k.   So, that extra 1k you're talking about is just the break even point.

The point is that every extra tax dollar has to be made up somewhere.  Increased revenue in down economy or cut costs.   Not too difficult to figure out which is the more efficient route.  If businesses could print money, it's easy to raise revenue. 

It only applies to every dollar you make over $250K.

Are we taxing businesses or the rich?

Posted by jonas1102 on 4/20/2011 6:44:00 PM (view original):

That is how the majority of businesses file their taxes.

So you want to go after SMALL businesses?   I see.

As a small business, I can tell you right now that throwing another $36 on top of each $1000 earned would change the way I do things.   You say "Only $36" but that's much easier when it's not your money.

Nope.  I was referring to the myth that increasing taxes is what prevents hiring.  The increase in taxes is minimal compared with the cost of salary/health care/benefits/etc.

The increase in taxes is another piece to the puzzle.  It's a cost.  

It is a cost, but it is far from the deciding cost on whether or not you are going to hire someone else.

I'd compare it to the government trying to balance the budget.  The defense budget is giant and bloated, but they make it seem like if they could just get rid of the tiny sliver represented by NPR, the NEA and Planned Parenthood, everything would be all right.