You’ve obviously never invested in a business. The only way what you are saying works is if the business owner raises prices to keep the cash flow going in order to invest in more equipment, if that is even necessary. In most cases, unless the assets are needed, they will raise prices in order to pay the additional tax. Smart business owners do not spend $20,000 on a vehicle just to save 3K or 4K in taxes.
Raising taxes does NOT stimulate spending in the real world unless you are talking about government spending.
You’ve obviously never invested in a business. The only way what you are saying works is if the business owner raises prices to keep the cash flow going in order to invest in more equipment, if that is even necessary. In most cases, unless the assets are needed, they will raise prices in order to pay the additional tax. Smart business owners do not spend $20,000 on a vehicle just to save 3K or 4K in taxes.
Raising taxes does NOT stimulate spending in the real world unless you are talking about government spending.
I didn’t say it was wise, I said it because it is done. I spent 30 years working with small small business and it was always tax planning. In a sole proprietorship you are soon in a 45% tax bracket with the se tax and state tax. You can drive a $66,000 pickup or have $33,000 in the bank. If cash flow allows many choose the $66,000 pickup.
There is a psychology to business, you can study the textbooks all you want but sometimes you better get in the real world. Do you really think anyone will pay a 90% tax? Hell no, they spend money unwisely in the business.