The result is that taxes most definitely DO affect businesses, and since
they cannot pass along all additional expenses to their customers, part of
the tax decreases their profit and so effectively the business owners DO
pay
taxes (separate from their personal income taxes, that is).

To a degree -- but long before personal "profits" get cut the business
"extras" will go out the window. Things like new equipment, landscaping,
added staff -- ALL of that stuff will be eliminated long before a business
owner's personal income is diminished.

And THAT is how taxes hurt the economy.

All that is true enough, but your analysis is incomplete, Jay.

What happens to the money taxed from businesses and consumers?

The government spends it. Your local government buys a new garbage
truck, and hires a couple of guys to drive it. Or builds a school,
which creates jobs for contractors, masons, electricians, plumbers,
etc. They spend almost all the money they earn.

The Feds pay the troops who in turn buy food and other supplies. The
Feds buys C-130s (even if the Air Force doesn't want them (!) creating
jobs for Lockheed-Martin employees. They in turn buy new cars, gas to
run them, etc.

A couple of those employees might even spend a night at your place on
their way to OSH!

vince norris