Increased Taxes Cause Layoffs?

Let’s Talk Business Accounting and Finance Increased Taxes Cause Layoffs?

  • Post
    Hi everyone!
    I’ve been wondering about the debate over whether increased business taxes cause layoffs.
    Many people say they do, and their argument is that higher business taxes means less money left to pay employees, so some workers get laid off.
    Other people say they don’t, because business taxes are on profits, and profit is what is left after all costs have been paid, including the costs of paying employees.

    The debate is over what happens in the short run. I know that in the long run, higher business taxes can lead to layoffs, because less profit means less investment spending, which means production might not keep up with population increase, and this would cause rising unemployment, and therefore layoffs. But my question is over whether higher taxes cause layoffs in the short-term.

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    Sterling Pistole
    Participant
    I never even thought about that but I feel like if the business is run right from the start then it shouldn’t cause any issues. Because they have already planned for the taxes and it does come from paychecks on whats being paid. Unless they are talking about the taxes the business has to pay but even then that is based on the profit so it still shouldn;t be an issue.
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    I don’t know if it’s about them doing it right, sometimes things happen that negatively impact the company. The business taxes are was the business has to pay back, and if the percentage is too high that they can’t afford to keep all their staff.
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