View Full Version : Good for business: Low taxes, or stability?
While reading a thread on a certain other forum (a '24-hour' one), an idea came to me. Which is more conducive to business expansion: having lower tax rates overall, or having a stable environment where, even if taxes are relatively high, you can be confident that whatever current laws and regulations that are in place now will continue to be static for the next, say, 10 years?
As an example, and these numbers are simplistic and arbitrary fill-in-the-blanks, would you rather pay 15% tax on business profits, knowing that every year the tax code would/could change drastically, or pay 25% knowing that whatever deductions and tax shelters you took advantage of now would still be advantageous 10 years from now.
Stability, hands down.
Either/or is a false premise as you'd end up with both.
Kind of like if we were to go to the "Fair Tax" - it would only happen in addition to what exists, rather than in place of.
Everyone, businesses, and individuals, need stability more than they need lower taxes.
I used to live on a lot less than I make now, same as most people. I made it back then, and I would make it now, if I had time to adjust.
I wish we could just get a flat tax rate. I know we won't because the same people who pay bribes/campaign contributions for special breaks now, would just pay bribes/campaign contributions to defeat any flat tax proposal.
In the end, really big business doesn't get surprised that often, since they are usually the ones who are actually writing the tax code in the first place.
Small businesses and individuals do have to wait and see before making major decisions.
Stability and predictability are good for business. Taxes are not uniformly bad no more than low taxes are uniformly good. It is entirely dependent on what the people decide. It is for them to decide. If someone doesn't like the decision made, that is their problem. It is no different if the decision is to have low, moderate or high taxes.
Stability usually does not come from a govt that has high tax rates. Usually, their tax rates are high and will go higher because they cannot stop spending money.
I don't see how either of these choices are good ones. Sort of like a choice between airline food and hospital food.
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