Thursday, September 27, 2012

Saturday, September 22, 2012

Lowering Taxes for Business

Every election, I hear someone say: "We need to lower taxes for business to create jobs, stimulate the economy, etc..."

On the surface, this seems like a really good idea.  Businesses employ people and we could use more jobs.

But would this really do any good?

I don't think so.  Businesses only pay taxes when they generate a profit (or in the case of some large corporations, work the system to avoid taxes even when they make a profit)

Most of the businesses I've worked with focus on EBIT (earnings before interest and taxes) as a key metric.  No EBIT?  No taxes.  

I've never heard someone say:  "Wow, the corporate tax rate just went down.  Let's get serious about making money now -- we were just playing before."  

Have you?

Here's a good article on how corporations are the real "moochers".