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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (321302)	1/16/2007 11:21:56 PM
From: TimF	Read Replies (1) \| Respond to of 1575771

There is usually a floor below which no taxes are due. And if that is the case, then laying people off and decreasing the amount of business isn't going to make the situation any better, but much, much worse. The company as a whole could be profitable, but the additional business might not be. The dropped business doesn't have to be more of the same. It could be a low margin area which was borderline as an investment and with higher taxes, doesn't make a worthwhile investment anymore. Or it could be a risky area, but with low taxes the possible rate of return might be enough to justify the risk, but with high taxes (say half of your profit or more is going to be taken away) it isn't worth it anymore. Some tax increases aren't income tax increases, I don't think income tax was specified. You can have a tax on your good or service that doesn't depend on income. Even if you do specify income taxes the net rate of post tax return could be low enough to make it uneconomical to devote your time to it, or to continue to invest in that area of the business. Also you might not be able to get labor without absorbing the cost of your workers income tax increase. You wouldn't be laying people off as much, as not being able to hire or retain them.