That's a mischaracterization of his argument. He's saying that a lower corporate tax rate would help grow companies, and the economy as a whole. We would continue to pay income and payroll taxes (which are the main source of tax income anyway), and that the benefits of a larger economy + more income/payroll tax income would offset the lowest revenue in corporate taxes.
The idea that companies hire linearly with revenue growth should be dying by now no? Is this not hacker news? We think that will continue for the foreseeable future?
Corporate revenue follows a power law distribution, and the top companies are not growing by hiring as many people as they can.
Apple earns about $1M/US employee in profit. Federal tax rate (~30%) on that number is say $300k. Payroll tax is 12.5% of salary (~100k) or $12.5k. So Apple would need to hire 12x the employees overnight to make up the tax shortfall if we suddenly halved their tax liability to $150k. That's if they actually paid the nominal tax rate (they dont).
This is all besides the fact that an inverse correlation between tax rates and economic growth is purely theoretical.
I'm not kidding, and you make a good point! I'd say that-- I really just don't have the numbers to prove this either way. Doing a quick search for "what percent of companies costs are payroll" led me to this http://smallbusiness.chron.com/percentage-business-overhead-... which suggests that 15-30% is common. But let's say a company has $100 more dollars to spend-- sure, $20 (or in Apple's case, $8.33) would go to labor. But the rest would go to other costs, which would further to grow the economy. If the company didn't feel like it needed to expand operations, then it would return its profits to it's investors/founders, who will invest it elsewhere.
The idea is that there are a lot of secondary effects of changing the tax rate, and not that payroll/income taxes would be recovered directly by one company, but that it would be recovered by the set of all companies who all are both: Receiving more money because they have a lower tax rate and receiving more money because other companies have more money to spend on them. This is also a compounding effect-- a lower tax rate might not give a benefit the first year, but as the economy benefits from compound growth, it should give a benefit in the future.
At some point the benefits of this would level out-- if it's hard to find useful ways to investment new money. Or at some point we just say "yeah, we know we could grow the economy more, but we simply need money to run the government with".
So, have we already reached the point where the benefit has leveled out? Maybe. But like, you can't deny this trend, it's just basic economics.
I also wasn't trying to argue against you, I just wanted to re-state his argument, since your previous response was just a tangent. The concept of economic growth and ideal tax rates is a different argument than how we spend our taxes, and I think that our advocacy of lower taxes as a way to increase tax income was perceived as a slight against your values.
