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Silver Wheaton Corp. Message Board

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  • ilap2004 ilap2004 Oct 12, 2012 12:56 PM Flag

    How Stupid Do They Think We Are?

     

    "with the lowest tax rates in the world and ways to finagle it down to zero, why risk hiring?"

    What are you talking about? Business pays no taxes? The taxes collected from business every year is zero? And if they started paying more taxes then they would hire more people? How many beers (or something) did you have?

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    • It's called might as well hire because of the NEGATIVE incentive for paying taxes.

      True story during a time way before yours.

      It's 1958, my Dad's turn to house the Friday night poker game. Bill and Sam walk in. Bill says, "I hear you hired two guys for that fourth bay that's empty in your garage."

      Sam says "Might as well try for a little profit." Bill says "Business good?". Sam says, well I made $2 last year net, but wound up paying 70% to Uncle. For my $1.40 I got to look at Ike on the screen and kept a whopping 60 pennies from my guys work. Had to work one of the bays myself, I made more being a worker for myself than a business owner. Not a pretty sight. Neither me nor Ike"

      "So I took the 60 cents profit and the $1.40 I would have given to Uncle, and took the whole $2.00 and hired two more mechanics at a buck apiece. For the effort I got a chance to make my $2 back, maybe they can produce another 1.25 each cents each on top of that."

      "Well" says Sam, "rather you try to earn more than just give up and give it all to Uncle. But, I can see where you deduct the two bucks for the new mechanics and all, but you're covering the guys cost--AND getting another $2.5 on top of that, instead of the original $2--but now don't you got to pay 70% of $2.50 instead of 70% of $2, that's now $1.75 for Uncle, and $.75 cents left over instead of 40 cents before you hired the two guys."

      "Now what do you do?"

      Bill says "By hiring the two guys I only work in the bay when I got someone don't show up, so I get some relief and a little extra coin from the business. I get to pay attention to running it. But, I guess I have to open up another 4 bay gas station to make serious coin, and at that profit level, maybe I can get out of the bay and manage the store as well as work in it"

      That's how it worked when people actually had to hire someone to get out of paying taxes.

      Now they just ship the jobs to China, and the taxes are nearly nonexistent. Where's the negative incentive that forces business to hire?

      There is none. It's all carrots and no stick. That makes being in business a lot more lucrative, and not hiring folks the only real incentive to avoid "the risk of the market place".

      Yosemetie? Or am I being too obtuse?

      Talk to the Germans the strongest economy in Europe. Their marginal tax rate is 48% and their sales tax 18%. They have had 3% unemployment since the end of the war.

      They seem to be doing just fine making and selling the finest cars on earth, although lately, they are getting a little sloppy.

    • What do you mean businesses pay no tax? Mine recently did. We work hard to give away as little as possible, but we still pay it.

 
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