Kinsley misses the mark. He’s right, every employee can potentially bring in more income. But every employee is also a potential liability to a small business owner in that he has to manage more people (more paperwork and red tape, mor time invested to ensure they ARE making money for the business). Which means less available time to actually do work or go out and solicit new business. It’s a Catch 22.
So while it might be nice to be in the next higher tax bracket, the small business owner might wake up and realize he is working harder but not really making that much more in compensation. Meanwhile his taxes (and other expenses like paperwork for each employee and health insurance costs keep rising).
Suddenly, he decides “you know what? I don’t want to work this hard and have no time with my family just so I can make a few extra thousand dollars for myself and for Uncle Sam.
Not only am I paying my own taxes, I’m taking all the risks that create jobs so more people can pay taxes. It’s not always a good return on time/energy investment.
So the small business person downsizes, lay employees off and spends a little more time with family or goes fishing more often... probably lives a few years longer.
There is a point of diminishing return. And piling on extra taxes, while probably not the dealbreaker, certainly helps one come to that realization.
No one paid the least bit of attention to the socialist experiment that just failed in Hawaii.
Hawaii offered free health care to uninsured children. What happened? People who had been PAYING for private insurance for their children STOPPED PAYING so their kids became eligible for “free” state health insurance.
The rate of enrollment of previously privately insured children was so great that Hawaii stopped the program after only a few months! (This just happened last week or so.)
The Rats never account for the fact that human nature leads people to behave strategically. If you can get something for free, most probably will. If you work for basically nothing, most probably won’t.
Kinsley misses the mark. He’s right, every employee can potentially bring in more income. But every employee is also a potential liability to a small business owner in that he has to manage more people (more paperwork and red tape, mor time invested to ensure they ARE making money for the business). Which means less available time to actually do work or go out and solicit new business. It’s a Catch 22.
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I can well attest to this, when I started my own small business I was advised by more experienced people not to get caught in the trap of having three or four employees. I was told to either do everything myself (with maybe one part time office worker) or go big. In between, I was told, lay the road to working long hours with little to show for it. I, of course, disregarded all that advice and wound up with three employees, at which point I started downsizing until I wound up going back to a home office and doing it all myself with my wife as bookkeeper and secretary. Some businesses are different but I was in a very technically demanding one and training people to do what I did was just not vey practical.
>>>So the small business person downsizes, lay employees off and spends a little more time with family or goes fishing more often... probably lives a few years longer.<<<
Who is John Galt?