Warren Buffet Channels The Ghost

I remember back when Obama had floated the idea of lowering the employee tax in order to stimulate business. I got into a silly argument on twitter trying to explain how silly that was because businesses dont' hire or not hire based on taxes. Rather it is the case that businesses hire in response to demand. If they need more people to produce the product or service they will hire that next person to get that profit. It would be near impossible to stifle employment via sane tax policy.

The way I saw it, the entire reduction in employment (payroll) taxes was simply yet another give away to businesses who already have an array of tax regulations that benefit them greatly.

Here comes Warren Buffet saying the same thing:

SUPPOSE that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.” Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.

It's the same argument. What business is going to say "meh, I got all these orders I COULD be filling, customers I could be serving and making that money, but these taxes are just too high so I'm just gonna pass on all that money so I don't have to pay that extra 3 percent (or whatever it is)."

That's silly. You think all the part time hiring going on right now for the holiday season would NOT happen due to payroll taxes? You think all these retailers would pass on selling as much as possible by hiring as many people as necessary to maximize profit?

Clearly not.