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Old 16th April 2013, 02:53 AM   #1

Join Date: Apr 2013
Posts: 1
Default Increased Taxes Cause Layoffs?

Hi everyone!

I've been wondering about the debate over whether increased business taxes cause layoffs.

Many people say they do, and their argument is that higher business taxes means less money left to pay employees, so some workers get laid off.

Other people say they don't, because business taxes are on profits, and profit is what is left after all costs have been paid, including the costs of paying employees.

(The debate is over what happens in the short run. I know that in the long run, higher business taxes can lead to layoffs, because less profit means less business investment spending, which means production might not keep up with population increase, and this would cause rising unemployment, and therefore layoffs. But my question is over whether higher taxes cause layoffs in the short-term.)

Thanks for your insights.

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