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.
The way taxes are structured, lower taxes is a second-order incentives issue, not a first-order availability of funds for expansion issue.