[Age of Reason]

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?

[Myrddin]

So you're saying a business that loses some profit to higher taxes, will lay-off employees and thereby lower its profits even more?

Absolutely. Higher taxes also steal money from the pockets of customers. Less business requires fewer employees. There is also a matter of losing profit margin. Higher taxes may make you unprofitable until you dump labor costs and have the remaining employees work extra hours to keep the business afloat. That is very common. Sometimes you have nothing left to cut. You just go out of business. Have a look around. It has been happening frequently in the last 3 years.