maybe we arent understanding each other.
Well, I re-read your earlier posts, and this post, and I do believe I'm understanding you perfectly. You support higher tax rates, period.
The relavent question is not "Can I present a scenario where someone re-invests with 50% tax rates?", the relavent question is "Do 50% tax rates provide more/less incentive to re-invest than 25% tax rates?".
I don't have time now to provide examples point by point, but I notice you provide 'explanations' of how a business owner might behave - but you totally ignored my numbers that show re-investing with 25% tax rates puts more in the pocket of the owner, and the ratio of money in pocket w/wo re-investment is the same. It is not greater with higher tax rates. Seems to me the bottom line is the motivator for a business.
the business owner gets far more reinvestment bang for his/her after tax buck when there are higher tax rates
Show me this mathematically, without resorting to the subjective owner perception of the value of his after-tax $. That is subjective - is re-investing $750K a 'bigger' sacrifice @ 25% rate, or is $500K a 'bigger' sacrifice @ 50% rate? In either case, they give up 100% of their income to re-investment. If we look at it just a little differently, clearly it would be less of a 'sacrifice' for the $750K take home person to re-invest $500K than the $500K take home person. With $750K income, he (or she/it - I'm not going to type it each time) would still have $250K take home to enjoy. So who is more likely to re-invest $500K?
i personally bought real estate that wouldnt have made financial sense for me personally to buy if i hadnt gotten the tax deductions or my personal tax rate had been lower, so dont tell me what i just suggested wouldnt happen.
I won't suggest that it couldn't happen, I'm saying that as far as general trends, it doesn't make economic sense that higher tax rates motivate re-investment and it won't happen generally. CFOs will make the same calculations that I did.
...however since in this line of reasoning the business owner is making the reinvestment because of the higher tax brackets it was appropriate to not have the business owner make the reinvestment in the case where the tax brackets werent higher.
And that is circular logic. IOW, to 'prove' that red cars are faster than blue cars, I painted this very fast car red, and a very slow car blue. And so it goes. All you 'proved' is that re-investing in a very profitably business will increase the value of the business and increase future profits. You did not demonstrate that higher tax rates motivate this more than lower tax rates.
Of course, we can investigate behavioral changes till the cows come home. If higher tax rates mean an owner isn't going to get as much absolute $ reward for his investment, then he will likely look for alternatives. Don't re-invest at all, re-invest somewhere with a lower tax rate (that option is available to some businesses), etc.
BTW, what is with your aversion to capitalizing the first word of a sentence? Clearly, both of your shift keys are not broken, as uppercase characters appear in your posts. It really does make reading your posts more difficult, and to be honest, they are hard for me to follow to begin with. There is a reason for the convention.
-ERD50