Originally Posted by jIMOh
I agree with fewer dollars on the table
However as a percentage of the investment, the small business owner is looking at ROI as much as the total number (I think).
If there was 250k of money (profit) being taxed...
and the cost of hiring someone was 50k, the anticipated increase in revenue would be measured against the 250k vs the 50k (IMO). If I have to spend 50k to add 10k onto the table, might not be worth the risk... where as if I have to spend 50k to add 50k to the table, that might be enough return to justify the risk of hiring.
One way for government to help (or not hurt) is to keep the cost of hiring low (lower SS/medicare taxes and lower taxes on the additional profit). Much of the cost of hiring is in the unemployment side of things (disability and unemployment insurance and in extending Cobra and similar programs for the unemployed) as these actions increase the costs of hiring even when the employee is no longer working.
Maybe it would help if you put some numbers on both the benefits and the the risk side and showed the before- and after- tax results. The way I see it, the "risk" that you talk about is lower because of taxes.
I view SS/medicare taxes as being transferred to employees via lower wages. I've done compensation for people who could work as employees or independent contrators, both the company and the workers automatically assumed SS/medicare would be reflected as differences in cash compensation. So I don't see them as impacting hiring (exception would be some short term, targeted program with lots of paperwork).
I can understand that unemployment benefits increase the risk of hiring to the extent that the particular state does experience ratings. But the original post on this dealt with income taxes on profits, and that's where I've been. Income taxes reduce the risk created by unemployment insurance, just like they reduce the benefit of successfully hiring someone.