Since most who own businesses do so because they want to outperfrom the market (a competing destination for risked capital), there is generally a required rate of return on their risk.
Most small business owners don't think in these terms. Their desire is simply to make money at their business, and concerns they could invest the money in the market instead are never realized as most of their assets aren't liquid enough to make the move to that kind of investment without significant costs that would undermine the entire idea. So the idea of "outperforming the market" is moot except perhaps as a tool to evaluate their profits.
If taxes go up on them, the only choice they have if they want to make a reasonable reward for their risk is to either 1 - Raise prices on their goods and services (essentially meaning the rate hikes don't hit them - it hits their customers. Unless their customers are all rich, then the tax rate is paid primarily by those are NOT weatlhy) or 2 - Cut costs, which generally means to scale back growth or reduce workforce or benefits to the people they hire. That of course hurts the very people those that want to raise tax rates are supposedly trying to help.
I agree with what you are saying here for the most part, but I believe a business should be able to survive upon its own merits. That means if taxes go up, you find a way to make it work or you get out of the business. Y
es, they can do the things you suggest, or they can do what they should, which is to simply accept the fact profits won't be as high with the higher tax rate. If those lower margins don't satisfy them, then perhaps they should do as you suggested earlier: Rather than either of these options you state now (raising prices or cutting costs) they should simply get out of business and invest in the market despite the probable losses they would sustain in order to make the move.
It is NOT a zero-sum game. If you want more revenue, don't raise tax RATES. Increase the tax BASE.
A better tax base comes when the government gives incentives to provide more jobs which are family sustaining with a good wage and benefits. This allows more people to have disposable income to spend, and consumer spending will boost the economy itself, and it would be a cycle leading to better economic times for all. Yet we continue to see policies which promote the hiring of part-time workers as opposed to full time employees and other policies which undermine benefits and earnings. That is the problem.