Do They Really Need More Tax Cuts?

A hypothetical Small Business owner, after they have paid all his costs, labor, rent, supplies and everything else that goes into running a company, makes $250,000.

The taxes go up 3% and now they make $242,000. Again, after all their costs are covered. [Note: for sake of this example, all the income was taxed. In actual terms, only the last $50,000 would be taxed 3% more, so they would pay even less. h/t jonathan-cunningham]

Is that owner now going to make drastic decisions to reduce their company? Are profits no longer their incentive? What is to say the drop in income will not be offset by a potential booming economy where they can make even more profits. You need customers to buy your goods and services. A rising tide raises all boats.

This idea that small businesses making $250,000 and over, of which there are so few, need more tax breaks is never flushed out to show why they need them. Is making $260,000 so different? It’s still more than what 99% of Americans make.