Quote Originally Posted by dragonrider
I'm not an expert on taxes, and I'm not going to deny that the cost of taxes cuts into the bottom line, which it obviously does. But I'm not sure I believe everytihg you said here is correct. I think things like the salaries, raises and bonuses you mentioned are deducted from the taxable income of the business. And a lot of the cost of expansion that you mentioned can also be deducted and depreciated over time as well.
It's a deduction; but for instance if you pay someone 35k... that doesn't equate to 35k back into the pocket of the business or even necessarily take 35k off their net income.

Also deductions and depreciation don't help businesses to get funds needed initially to expand. Raising their taxes would further make this difficult.