I'm not an accountant, but aren't the salaries paid to people you hire expenses thus not subject to corporate tax? In other words, if you make $1M a year and spend $1M a year on salaries, you pay $0 in taxes. If you instead spend $800K on salaries and have no other expenses, you pay tax on the $200K in profit.
Besides which, the point of the letter was to argue a single point: innovation over enforcement. Why stuff it up with topics like taxes, healthcare, or any other unrelated topic that would only serve to dilute the core message?
You're right. Taxes are in income net of salaries and expenses. If the tax rate was 15% versus 35%, the correct statement is not that it'd free up 20% of revenue for expansion, but rather that it would increase profits, presumably creating greater incentives for expansion.
The way taxes are structured, lower taxes is a second-order incentives issue, not a first-order availability of funds for expansion issue.
By that logic, isn't there already huge incentive for 'expansion' because anything not plowed in to expansion will be taxed, but anything rolled in to expansion won't be taxed?
EDIT: What we see now is the exact opposite of that - some companies sitting on huge hoards of cash, just waiting. Waiting for what, I'm not quite sure, but there's nothing stopping them from 'expansion' right now.
Besides which, the point of the letter was to argue a single point: innovation over enforcement. Why stuff it up with topics like taxes, healthcare, or any other unrelated topic that would only serve to dilute the core message?