Didn’t want to highjack the current “JC” thread. This actually relates less to the general theory or economics of the JC claim and more to a very specific aspect.
On hiring people and taxes; Isn’t it true that employers don’t pay taxes on the money used to pay staff? Firms, whether LLCs or publicly traded corporations, pay taxes on their profits, not gross revenues. So, hiring staff that costs $100,000/yr will reduce the taxable income of said interest by $100k for that tax year.
You might counter that a firm won’t want to lose that potential profit by hiring those staffers. But, the added value of those employees will add more than $100,000 of value to the company’s operations. After all, if it wouldn’t, they wouldn’t be hired no matter what the tax situation.
Increasing personal income taxes on the rich is a different subject than the one discussed above. Even middle-class entrepreneurs set up LLCs or other such entities that segregate their personal finances from that of the business (which is what employs people). Even if such personal expenses as the wages of the gardener, pool boy, etc. are normally borne by one’s personal income and may not be fully tax deductible, couldn’t the owner of a company write in a “non-monetary benefit” for their position? Say, free lawn care or pool maintenance, paid by the “firm”?
I never thought about this particular claim much before, but now that I do, it doesn’t seem to make much sense. Is any of the above inaccurate? Am I missing something?