| ManusJustus said: Think of this example. A wealthy business owner hires 1000 people to produce widgets. 1000 is the optimum number of employees needed to maximinze profits, and the business owner takes those profits and puts them in his profit. Lets say that he makes 20% profits from his business. Then Socialist Obama decides to tax him 50% of his earnings. Now the businessman makes half as much money, but the optimum number of employees needed to maximize profits stays the same, so his raise in individual taxes has no effect on how many individuals he employees. |
Unfortunately, the corporation in this case (remember, there are no more robber barrons) doesn't have money to re-invest in new manufacturing equipment while paying the dividends to pension funds; and depending on what he chooses either pension funds go bankrupt or the company is eaten alive by competition from China.
Either way either 1,000 workers enter into the work force as the plant closes or enter into the workforce because they can no longer afford to be retired. But that doesn't increase unemployment.
