<<Not really , the tax is out of the funds availible for new hires so it certainly reduces the potential for new hireing.>>
? ? ? The TAX is on Joe's earnings from the business. The more the business spends on new hires, the less money there is for Joe's salary and/or dividends, and the less Joe's annual income. Once the annual income dips to $250K or less, there is no tax increase for Joe at all. If he DOESN'T hire new people, there's more money to pay Joe, and he will be taxed at the higher rate, unless he chooses not to distribute some of the profits to himself, leaves it in the company and keeps his income under $250K (but then can't access the funds for his own use.)
<<Joe's ambition to own his own business is slowed by paying taxes , more taxes slow him more , at some point the taxes cross the margin at which he will never be able to buy the business . . . >>
Haven't we already been through this? If JOE is too fucking greedy to work for $250K before taxes, SOMEBODY ELSE will be all too happy to work for $250K before taxes, even if this year it won't net him as much after tax as it did the year before. From a $250K annual income, regardless of the tax on it, there will be plenty left over to support somebody (maybe not Greedy Joe) very nicely. It's really Joe's choice to buy or not to buy - - somebody else will jump at the chance if he passes, maybe paying less because Joe backed out.
<<and at an even greater point it crosses the point at which he would be unable to build it himself.>>
Joe won't bother to build a business which could earn him up to $250K in pre-tax annual earnings WITH ABSOLUTELY NO TAX INCREASE to contend with? Well, fuck Joe! Plenty of other plumbers would jump at the chance. WILL jump at the chance. Not everybody needs $250K per year just to live on.
<<Kennedy reduced Taxes a lot and the effects were terriffic , why is this forgettable?>>
I think you also forgot the circumstances in which JFK was able to reduce taxes - - the U.S. in the wake of WWII was still swimming in unprecedented prosperity, with the biggest share of the world's export trade that it has ever enjoyed. You didn't see a single Asian car on American roads, gas and everything else was relatively cheap and the demand for consumer goods, pent up during the war, had been making everyone rich. You may have noticed, today times aren't so good. You've got a half-trillion dollar deficit and the costs of the Iraq war, although deferred, will have to be paid at some point, in the total sum of $3 trillion. Your balance-of-payments situation is pretty sick, you're a net borrower, not a net creditor . . . Must I go on?