What are the incentives? The tax cuts themselves or is there an added in 'bonus'? For instance, if your dad hires 200 people, what does he gain other than the said 200 employees
The incentives are the ability to make more money. Investments into businesses cost money, lots of it, and there tends to be a risk in losing the money you invest. If you know that your business will make more money -because taxes are less- you will be more willing to risk your money. When people risk their money into a business, its not magical money that comes from no where, for small business people its often money they earn through hours of labor.
If my dad was to hire 200 people for some business, because he needed them, he would gain what ever economic output those 200 people were willing to add to his business, in exchange for a valuable service (Money and benefits). With more people working for him, idealy it means he will have more money in his pocket to ether invest, spend, save, or donate to some charitable orginization.
Lets say a business owner has the option to expand his business. If he knows there is a 40% risk he will lose his money and the expansion will fail, would he be more willing to go ahead with the risk if he made more money on the investment? Obviously he would be. Investors are just Americans who want to make money for themselves in order to improve their situation. With less taxes, they are more willing to risk their hard earned money for rewards.
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