re: #103 stevemcg

Also, lowering taxes actually makes an incentive to cut back on expenses to maximize profits. By this, I mean that there is sort of a multiplier effect on the profit margin, where there is a real incentive to cut everything to the bone. Just for example, if my company reports 500K on my K-1 and my effective rate was 35%, I keep 330K. But if I push my employees harder (by letting attrition go unanswered), and maybe shorting on some maintenance issues, and cutting back on certain other things that might improve the quality of the workplace, I will keep 65% of everything I save. However, at a higher effective tax rate, there is less incentive to make those knds of cuts because there would be less to gain.

but letting attrition go unanswered and cutting back and pushing folks harder isn’t going to put more money in your pocket for long. so it’s a shortsighted business owner who looks at incentives in that fashion…