Income taxes are not an adjustment to GROSS income but to NET income (profit) this is a point I have been fruitlessly trying to make understood. Surely you see that the decision to stay in a business is decided by its profitability which is NOT affected by income taxes. EVERY business' income is taxed the same way given its form of incorporation or non-incorporation.
Profitability is the determinant of investment and that profitability will be affected by income taxes the same way for all businesses thus it is NOT affected by IT. Your decision to get out will be because the rate of profit (before IT) is not high enough NOT because the income tax exists.
Profitability is the determinant of investment and that profitability will be affected by income taxes the same way for all businesses thus it is NOT affected by IT. Your decision to get out will be because the rate of profit (before IT) is not high enough NOT because the income tax exists.Besides, whatever you might do with your resources that you think will bring you greater return would be taxed the same way, too. If the other opportunity has a greater return, it will be greater regardless of the income tax.