Most small businesses run as subchapter S corporations. The business tax filing and individual tax filing are the same act. Much of the money in that tax return is really the business assets/revenues/expenses. Jacking up the rates on that individual/owner squeezes money out of the business. The typical way to deal with having less money due to tax expenses is to ditch labor expenses to compensate. Higher individual tax results in firing existing employees or deciding not to hire more.
The typical way to deal with having less money due to tax expenses is to ditch labor expenses to compensate. Why does a business have employees in the first place?
Answer: business have employees to increase profits.
So you're saying a business that loses some profit to higher taxes, will lay-off employees and thereby lower its profits even more?