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It wasn't long ago that someone on cd (Obama supporter of course) posted "government should take away all tax deductions, raise taxes on landlords". Obviously this Obama supporter would rather pay higher rent or live in government run housing.
You can call it what you want but those taxes are hidden in the cost of the products you purchase. When I hand you bill this it what it looks like on my side.
$1 electricity
$1 shipping
$1 taxes
$3 inventory
------------------------
$6 subtotal
------------------------
$4 My profit
------------------------
$10 total I'm going to charge you
Instead of me including the tax in your cost of $10 would you rather see it itemized on the bill?
The reason it would not be fair to simply increase you individual income tax is everyone already pays this hidden tax no mater what their income is. You would unfairly burden the middle class with even more taxes if it were just moved to income tax.
If corporate tax is ended, you'd still charge $10 and your profit would become $5.
IF the theoretical economics taught in schools was so all-knowing and capable of predicting economic conditions, why does the world continually find itself beset with economic problems?
Mostly because they ignore basic economics.
Throughout history no firm has been able to hod on to excess profits for long in the absence of support by government. New competitors enter markets where profits are high. There would be a short term benefit to corporations. Prices do tend to remain a bit sticky for awhile. The length of time depends on how easy it is to enter a certain market. The short term benefit would benefit myself and every other American who has an IRA or 401k that includes company stocks.
If corporate tax is ended, you'd still charge $10 and your profit would become $5.
Do you understand the effects of competition or can't you connect the dots?
so instead of taking that risk you would rather the government keep those taxes high and companies will continue to look for a cheaper way of doing business and send more and more jobs overseas.
I know on paper we have the high tax rate on businesses but I don't think many are actually paying that high rate. GE, Apple, Google, and many other big companies pay about 8 percent and hide billions of dollars overseas to avoid taxes.
From what I can tell this is not the argument here. The argument is ending taxes on corporations which in the end is really a regressive tax on consumers, not an end to taxes on income.
Taxes on corporations should end as they are by and large a very regressive tax. It costs the middle and lower classes far more than it does the upper classes.
Income tax should then be taxed all the same. It should matter none how it is derived.
Sigh. I've seen this whole argument played out.
1. taxes on corporations are taxes on profits, the relationship between their taxes, and prices is not 1-1, and have a lot fo competing issues like the elasticity of demand of a product.
2. We need to pay for all the benefits that we receive that the government does do, infrastructure, defense, etc. Given that one way is via corporate taxation, another is via personal taxation. Generally the poor people do not in fact own companys. Now see #1. This tax is not regressive per se, although large loopholes can make it that way. (See GE paying $10 in taxes one year)
Just saying "this is a regressive tax" does not in fact make your statement true.
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68,329 posts, read 54,389,283 times
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Quote:
Originally Posted by whogo
Mostly because they ignore basic economics.
I think it more likely because theoretical economics often falls victim to this truth:
In theory, theory and practice are the same
In practice, they're not
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