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Old 11-07-2010, 07:48 AM
 
2,088 posts, read 2,251,096 times
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Yes , it is true that lower overall taxes are good for all businesses. But what really gives incentives for businesses to expand and create more jobs? I think jobs is what we all want in the end.

Let me give you my opinion as a engineer at a small firm developing industrial and manufacturing tools. In our meetings when we discuss new products, we never talk about the tax rate at all. The most important factor for the company on whether or not to create a new product or expand a design team is "what is the demand in the industry for this product"? If there are very few potential customers, my firm will not make the investment no matter what the tax rate is.

Now I am not saying that tax rate has no effect. Lower tax rates gives the design team a bigger budget(since the company can invest the savings from lower taxes). When we have a larger budget, my engineering manager can hire more people and my team can build better products.

But in the end, we will not make an investment unless there is demand for this product in the industry.
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Old 11-07-2010, 07:55 AM
 
Location: Columbus
4,879 posts, read 3,909,669 times
Reputation: 1447
Quote:
Originally Posted by Bostonian123 View Post
Yes , it is true that lower overall taxes are good for all businesses. But what really gives incentives for businesses to expand and create more jobs? I think jobs is what we all want in the end.

Let me give you my opinion as a engineer at a small firm developing industrial and manufacturing tools. In our meetings when we discuss new products, we never talk about the tax rate at all. The most important factor for the company on whether or not to create a new product or expand a design team is "what is the demand in the industry for this product"? If there are very few potential customers, my firm will not make the investment no matter what the tax rate is.

Now I am not saying that tax rate has no effect. Lower tax rates gives the design team a bigger budget(since the company can invest the savings from lower taxes). When we have a larger budget, my engineering manager can hire more people and my team can build better products.

But in the end, we will not make an investment unless there is demand for this product in the industry.
Couldn't agree more.
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Old 11-07-2010, 09:09 AM
 
Location: Phoenix, AZ
6,221 posts, read 3,522,814 times
Reputation: 3831
Quote:
Originally Posted by Bostonian123 View Post
Yes , it is true that lower overall taxes are good for all businesses. But what really gives incentives for businesses to expand and create more jobs? I think jobs is what we all want in the end.

Let me give you my opinion as a engineer at a small firm developing industrial and manufacturing tools. In our meetings when we discuss new products, we never talk about the tax rate at all. The most important factor for the company on whether or not to create a new product or expand a design team is "what is the demand in the industry for this product"? If there are very few potential customers, my firm will not make the investment no matter what the tax rate is.

Now I am not saying that tax rate has no effect. Lower tax rates gives the design team a bigger budget(since the company can invest the savings from lower taxes). When we have a larger budget, my engineering manager can hire more people and my team can build better products.

But in the end, we will not make an investment unless there is demand for this product in the industry.
Exactly.

But, the supply siders insist that if you unleash a product in the market, people will buy it regardless.

Consumer spending is the main driver. But, if people don't have jobs or good paying jobs, they are going to spend less. What is the point of launching products that few are going to buy?
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Old 11-07-2010, 09:15 AM
 
Location: San Francisco, CA
13,992 posts, read 10,939,534 times
Reputation: 12783
Quote:
Originally Posted by Bostonian123 View Post
Yes , it is true that lower overall taxes are good for all businesses. But what really gives incentives for businesses to expand and create more jobs? I think jobs is what we all want in the end.

Let me give you my opinion as a engineer at a small firm developing industrial and manufacturing tools. In our meetings when we discuss new products, we never talk about the tax rate at all. The most important factor for the company on whether or not to create a new product or expand a design team is "what is the demand in the industry for this product"? If there are very few potential customers, my firm will not make the investment no matter what the tax rate is.

Now I am not saying that tax rate has no effect. Lower tax rates gives the design team a bigger budget(since the company can invest the savings from lower taxes). When we have a larger budget, my engineering manager can hire more people and my team can build better products.

But in the end, we will not make an investment unless there is demand for this product in the industry.
Now you see why the Republican strategy of slashing taxes is not going to rescue the economy.
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Old 11-07-2010, 09:44 AM
 
19,216 posts, read 13,001,067 times
Reputation: 2337
Quote:
Originally Posted by Bostonian123 View Post
Yes , it is true that lower overall taxes are good for all businesses. But what really gives incentives for businesses to expand and create more jobs? I think jobs is what we all want in the end.

Let me give you my opinion as a engineer at a small firm developing industrial and manufacturing tools. In our meetings when we discuss new products, we never talk about the tax rate at all. The most important factor for the company on whether or not to create a new product or expand a design team is "what is the demand in the industry for this product"? If there are very few potential customers, my firm will not make the investment no matter what the tax rate is.

Now I am not saying that tax rate has no effect. Lower tax rates gives the design team a bigger budget(since the company can invest the savings from lower taxes). When we have a larger budget, my engineering manager can hire more people and my team can build better products.

But in the end, we will not make an investment unless there is demand for this product in the industry.
Well, you can create a demand, by simply getting a law enacted to require purchases of your products.
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Old 11-07-2010, 09:53 AM
 
17,816 posts, read 19,829,113 times
Reputation: 7485
Quote:
Originally Posted by Bostonian123 View Post
Yes , it is true that lower overall taxes are good for all businesses. But what really gives incentives for businesses to expand and create more jobs? I think jobs is what we all want in the end.

Let me give you my opinion as a engineer at a small firm developing industrial and manufacturing tools. In our meetings when we discuss new products, we never talk about the tax rate at all. The most important factor for the company on whether or not to create a new product or expand a design team is "what is the demand in the industry for this product"? If there are very few potential customers, my firm will not make the investment no matter what the tax rate is.

Now I am not saying that tax rate has no effect. Lower tax rates gives the design team a bigger budget(since the company can invest the savings from lower taxes). When we have a larger budget, my engineering manager can hire more people and my team can build better products.

But in the end, we will not make an investment unless there is demand for this product in the industry.
Tax cuts allow people to spend more... what is demand if there is no money to buy that product... I don't think BUSINESSES should get tax cuts, in fact, I think there should be an increase in taxes for BUSINESSES because that's were the most tax fraud occurs... I think personal income tax should go down... for all income levels... well, almost all...
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Old 11-07-2010, 01:23 PM
 
Location: it depends
6,074 posts, read 5,339,201 times
Reputation: 5771
Default The underlying issue

The fundamental question, after one discards tax cuts as a means to boost aggregate demand, is whether aggregate demand is susceptible to being managed or encouraged.

Tax policy should be built to minimize distortions and inefficiencies on the real economy. Demand management has a long history of failure. The economy will recover in due time.
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Old 11-07-2010, 01:36 PM
 
32,498 posts, read 26,381,433 times
Reputation: 19148
Quote:
Originally Posted by Bostonian123 View Post
Yes , it is true that lower overall taxes are good for all businesses. But what really gives incentives for businesses to expand and create more jobs? I think jobs is what we all want in the end.

Let me give you my opinion as a engineer at a small firm developing industrial and manufacturing tools. In our meetings when we discuss new products, we never talk about the tax rate at all. The most important factor for the company on whether or not to create a new product or expand a design team is "what is the demand in the industry for this product"? If there are very few potential customers, my firm will not make the investment no matter what the tax rate is.

Now I am not saying that tax rate has no effect. Lower tax rates gives the design team a bigger budget(since the company can invest the savings from lower taxes). When we have a larger budget, my engineering manager can hire more people and my team can build better products.

But in the end, we will not make an investment unless there is demand for this product in the industry.
it isnt just taxes that is hurting things, regulations come into play as does union work rules.

for instance, lets say you come up with a new widget(yes i have training in accounting among other things). you know what your materials costs are, you know what your fixed costs are, and you have a good idea what your variable costs are. using those costs you come up with a price that allows you to sell say 100,000 widgets for a certain price where you can make a profit(lets say your break even point is 55,000).

you can create a customer demand through advertising, and you start selling these widgets. but the government steps in and puts a few more regulations on your widgets, and the unions require a change in work rules, and both cost you more money to make these widgets. you now have to either refigure your costs for a new beak even point, or raise the price. in the mean time another business has reverse engineered your widget, and is manufacturing it in china or india, and selling it here. not much you can do about it, but they are undercutting your costs by a substantial amount.

so what do you do? stop making the widgets? figure a way to cut costs? move to where the cost of doing business is cheaper? stop making the product entirely?
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Old 11-07-2010, 01:38 PM
 
Location: Tampa Florida
22,241 posts, read 15,323,013 times
Reputation: 4583
Quote:
Originally Posted by Bostonian123 View Post
Yes , it is true that lower overall taxes are good for all businesses. But what really gives incentives for businesses to expand and create more jobs? I think jobs is what we all want in the end.

Let me give you my opinion as a engineer at a small firm developing industrial and manufacturing tools. In our meetings when we discuss new products, we never talk about the tax rate at all. The most important factor for the company on whether or not to create a new product or expand a design team is "what is the demand in the industry for this product"? If there are very few potential customers, my firm will not make the investment no matter what the tax rate is.

Now I am not saying that tax rate has no effect. Lower tax rates gives the design team a bigger budget(since the company can invest the savings from lower taxes). When we have a larger budget, my engineering manager can hire more people and my team can build better products.

But in the end, we will not make an investment unless there is demand for this product in the industry.
That is pretty much the way it works in most all Businesses. The taxes and other costs of doing business, factor into the price of the product. The Company then has to decide if the product is marketable at the price. But initially, there has to be a reasonable expectation that demand exists.
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Old 11-07-2010, 01:46 PM
 
Location: NC
10,005 posts, read 9,026,330 times
Reputation: 3073
Quote:
Originally Posted by Bostonian123 View Post
Yes , it is true that lower overall taxes are good for all businesses. But what really gives incentives for businesses to expand and create more jobs? I think jobs is what we all want in the end.

Let me give you my opinion as a engineer at a small firm developing industrial and manufacturing tools. In our meetings when we discuss new products, we never talk about the tax rate at all. The most important factor for the company on whether or not to create a new product or expand a design team is "what is the demand in the industry for this product"? If there are very few potential customers, my firm will not make the investment no matter what the tax rate is.

Now I am not saying that tax rate has no effect. Lower tax rates gives the design team a bigger budget(since the company can invest the savings from lower taxes). When we have a larger budget, my engineering manager can hire more people and my team can build better products.

But in the end, we will not make an investment unless there is demand for this product in the industry.
Demand is king. It doesn't matter what the tax rate is if you cannot find buyers for anything. Thus why tax cuts for small business and lower income individuals are so much more effective then tax cuts for the wealthy and large business as they are more likely to spend it quickly.
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