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Voting:  

will lower taxes boost your business

Voting duration:

Start: 19.09.2011, 19:10

End date: Not specified

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- yes
 
 3
- no
 
 4
- greater demand will boost my business more than low taxes would
 
 8

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Topic:
  

Topic created : 19.09.2011, 19:10
shallom
 
a lot of us, Americans have heard politicians say that low, almost zero taxes on business will create economic growth. so based on  your virtonomics company will lower taxes boost your business.   

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4.10.2011, 15:05
faiez
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lower income taxes should boost demand..
lower corporate taxes wouldnt do much... 
 

7.10.2011, 18:27
JustNash
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this could become a very interesting, long, hard discussion Well
 
I see grounds for all answers really, depending on further interpretations.
 
As nobody has voted for "yes" yet, I'll start building a case for that (even though I voted for the 3rd option myself).
 
Yes, zero taxes on my real world company would boost my business. When taxes are lower, I can drop the margins I need in order to achieve my desired return on equity. This means I have room to lower my prices, which will boost my units sold. The result is a wealthier society that has in general more of my units at a cheaper price.
 
Of course, in reality, my competitors might just lower their prices as well. This would increase the total units of our industry, but only at the expense of other industries. The fact that lower prices would leave more room in families' budgets is invalid in my opinion. It's a very long explanation, but to keep it oversimplified: compare a tax break to the government just handing every citizen a freshly printed 100 dollar bill each month. Doesn't make society as a whole wealthier, does it? 
 

7.10.2011, 19:46.     Subject: But is boosting my business good for the country in question?
IQof20
Two years with Virtonomics
 
This is the situation in a global economy of where if I have lower taxes do I take that money an invest or spend it locally?
 
Taxes are virtually guaranteed to be spent first off and to be spent locally (unless you happen to enjoy sending you military all over the world for some reason I suppose).  
 
It is similar somewhat for individuals or "small businesses" in that they rarely move money for expenditures, new staff or improvements "offshore", but for large multinational corporations it is substantially different.  If England eliminates taxes for Rolls Royce they might well take those monies and invest them overseas for lower labor costs (big plant here in the USA in Indianapolis).  So England's return of capital to RR becomes a direct drain on the local UK economy by moving that capital overseas.
 
Now there of course situations where such things can benefit an economy as a whole (see the USA where it's primary export is it's currency which rarely returns).  Such situations *CAN* result in economies expanding through the expansion of currency w/o causing local inflation as the currency gets used for trade outside of the local economy exclusively.  But this is longer term play and really is only capable through many things that are not purely economic.  Also, it is not something that can continue forever or w/o limit and many of the forces that would cause such a situation to degrade are social vs. economic.
 
I had argued for changes to the US Currency several decades back for the alteration of currency to remove presidential figures and instead replace them with various great historic events, achievements, etc. that are global vs. national.  To make American currency more palatable socially internationally leading to usage abroad for local transactions and the ability for an inflation in money supply while lessening the effect of an inflation of prices.  The US Dollar still holds this position in most respects despite the effects of the Euro as a potential rival.  
 
In the end though this is a trick of monetary policy which *might* pay off depending upon your market power, while taxation and local spending is essentially guaranteed to recycle into the economy.
 
In the US, I've often found it odd how someone can get up in arms about hispanic workers sending their money "back home" to their families (robbing America as it were) while those same folks give a pass to large corporations per taxes.  In fact, the $100 per week going to Mexico from a day laborer seems quite a small issue to be concerned about while billions of dollars take the same path through corporate hands.
 
I think in some respects it is a problem of scale.  People know what $100 feels like.  They don't understand a billion dollars at all and it is hard for most individuals to grasp those kinds of figures or the kind of scale/scope of damage such monetary investments can wreck. 
 

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