How does that work in the States? Here you would only pay personal income tax on money which you withdrew from the business. If you want to put money into the business then just don't take it out in the first place.....

If your company is an S-corp (which Tightline Computers, Inc. is), all profit flows through to the owners' personal taxes whether or not the money stays in the company. So if TLC make a profit of $50,000 this year (after salaries, expenses, taxes, etc), Andy will be taxed on an extra $25,000 of income (in additon to his salary) and so will I.

This is the was that many small businesses in the US are run. So you see, raising taxes on anyone with an income over $250,000 really hurts small business.