Thread: American Jobs Act introduced in Congress

Think of all the lawyers that would be out of a job if taxes were lowered to nothing? .....Tax lawyers would be extinct.....ahh what a good dream.

Originally Posted by jviehe

It depends on the cost of labor. If it costs me more to hire someone than the resulting profit from increased production, then that would be a loss, not a gain.

Exactly, and that has nothing to do with other profits gained by tax cuts.

Originally Posted by jviehe

And you know this how?

It was explained to me why I was being layed off, even though they made record profits. I used to believe what you do, until president of the company showed me I missunderstood how they handle profits compared to hiring workers. They are not linked. The are not proportionally increasing and decreasing. How they figure out how many workers they need is a much different formula than if they have more money they hire more. It has soley to do with if the worker can bring in more money than they cost the company.

Originally Posted by GrayMan

It was explained to me why I was being layed off, even though they made record profits. I used to believe what you do, until president of the company showed me I missunderstood how they handle profits compared to hiring workers. They are not linked. The are not proportionally increasing and decreasing. How they figure out how many workers they need is a much different formula than if they have more money they hire more. It has soley to do with if the worker can bring in more money than they cost the company.

Thats seems a strecth to then claim "It a business model that most business men share "

Originally Posted by lutherf

It goes well beyond that. The expense of the tax is only part of the equation. The expense of compliance with all the tax law is often a bigger expense than the tax itself as your business increases in size.

This is a very important point. The average cost is 30 cents on the dollar. In other words, for every dollar of corporate tax paid it costs companies another 30 cents in accounting and administrative pay.

Originally Posted by lutherf

It goes well beyond that. The expense of the tax is only part of the equation. The expense of compliance with all the tax law is often a bigger expense than the tax itself as your business increases in size. Basically, the elimination of corporate income tax would allow corporations to focus on efficiency without having to factor in tax ramifications. Decisions about acquiring new equipment or retiring old equipment would be a breeze. Decisions regarding investments in real property could be focused on only the economic impact. Decisions about dumping money into R&D could be no brainers.

Would employers hire just because of the elimination of the tax? No. But they would hire because a lot of the prohibitive costs and uncertainty regarding the ramifications of expanding their services would be eliminated thus allowing them to more readily explore new opportunities.

And thus the corporation recieves even more profit by getting some more workers in its tax and HR department.

I still don't see how this "creates" jobs. Why does everyone assume that MORE MONEY = MORE WORKERS? Anyone who is trying to make money will not just hire more people just because they made more this year. The only companies this would help are the ones going under and cannot afford to pay the workers they need.