Iowa small business owner Mike Draper cuts through the clutter on whether Republican corporate tax breaks will actually help Iowa small businesses create new jobs.
From Mr. Draper’s comments:
But for argument sake, let’s say the governor wanted to cut state income-tax rates as well to help small businesses add jobs. Say he even reduced my state taxes by 20 percent and I was expected to hire new staff with that savings. On a salary of $40,000 per year, that 20 percent reduction moves my taxes by 1 percent, or 400 annual dollars.
So, indeed, I could hire a new employee with my savings; it would just take 100 years (and by 2111, would $40,000 per year even be enough for them to afford the newest hover-board that all the other guys at the store will have?).
However, if that tax savings were coupled with public pre-K being eliminated for my son, a $400 annual savings may be slightly offset by the additional $8,000 annually I’d have to spend on day care.
Read his full comments from the Des Moines Register go here.