Quote Originally Posted by maladroit
that is a valid point about profitability, but it has nothing to do with productivity

productivity
Definition
The amount of output per unit of input (labor, equipment, and capital). There are many different ways of measuring productivity. For example, in a factory productivity might be measured based on the number of hours it takes to produce a good, while in the service sector productivity might be measured based on the revenue generated by an employee divided by his/her salary.

productivity Definition
sigh.. ok here we go again.

Lower taxes on businesses that work in large numbers (meaning that regardless if they are a small or large business.. they pull in large amount of revenue/profit) would increase productivity by allowing the business to purchase more equipment/tools/assets etc etc that make the efficiency/productivity of the company much higher.

Here's a crude example: Johnny runs a paper route before school that allows him to deliver papers to 40 houses on his 10 speed bicycle.. johnny is currently taxed 33% on his earnings. Johnny saves his money to be able to buy a Moped which allows him to take on 2 additional routes in 2 neighborhoods outside of his own in the same amount of time it took him to deliver papers in his neighborhood alone. Johnny has increased both his productivity and efficiency.

Tax Johnny an additional 3-6% and now you impede Johnny's ability to be able to purchase that moped. That 3-6% could've been all that Johnny had to set aside for the Moped budget; all the other money could've already been accounted for some of Johnny's other needs personally and for the cost to maintain his paper route.

Secondly.. lower taxes; can hire more employee's. Which could also increase your productivity. More employees working typically mean shorter wait times for product development, research or whatever else. Anyway you look at it; regardless if it directly puts a product on the shelf or not, additional employees equate to higher productivity within the company; which indirectly effects the cost of the product and the volume of which it is traded.