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The answer is of course SOME is passed on. The answer is neither zero nor one hundred percent.
We have at least 2 posters who have personally worked the the formulas and they include FIT. They appear to be all large corps. This is proof the number is not 0.
Some do not. I set the prices at the tiny C corp I work at. FIT is zero factor. Market drives our pricing. I constantly seek feedback on our pricing. This is proof it is not 100.
What is the real number? I have no idea. I strongly suspect it to be between 35% and 65%. My opinion plus 5 dollars gets you a coffee at Starbucks.
Saying it is 100% passed on ignores the market setting prices.
If they were 100% passed on, corps would never push the story that the taxes are paid by the consumer. IE they would never fight them if at least some of it was felt by shareholders. DONT believe pro corp people saying they dont pay corp income tax. (Would you all believe AOC on taxes on rich people being good? Of course not)
As for inflation. People ignore factors that dont fit whatever side they are on.
Factors I can think of
Energy
Govt spending
Ukraine war
Supply chain is still an issue. yes really. No, not as much as a year ago.
Regulations
Green requirements
Availability of labor for low wage jobs.
Availability of labor in certain high paid specialties.
1st world countries have used their central banks to manipulate the money supply by giving loans at near 0% to banks who lend out at 1-2% to big business (basically free money), quantitative easing for a decade (deflating your currency increases the amount of debt owed as well), AND a lack of a plan to deal with huge budget deficits (Specific to the US Under Obama, Trump, or Biden) is what causes this.
But the American people cheered on much of this including the Conservatives who were thrown off because they liked the stock returns that happened due to the artificial free money supply. If you cheered on your 401k and Stock prices in the past 6 years rising like a rocket to the moon then you have supported this type of economic system and should also know the party had to end at some point. Reducing the debt and lowering the deficit would help but if we are going to continue handing out free money as a monetary policy even during times when the stock market is rising rapidly then inflation will continue even with those reductions in debt.
That would reduce prices which would increase demand and increase inflation to worse levels.
No, the way to end inflation is to keep raising rates so that easy credit dies and the only ones left borrowing are those most likely to successfully deploy that capital. When demand craters, supply will rebound and probably overshoot and the glut of products & services will reduce prices. You then bring rates down to a reasonable level and keep steady at an annual 2% inflation target
Cut government spending by 50% minimum. Slash and burn taxes by 50% minimum. Slash and burn regulation. Slash and burn the bloated government payroll, especially in the regulatory and "social welfare" bureaucracies. Abolish all income taxes, personal AND corporate.
Inflation has always been a direct product of government greed.
Last edited by albert648; 10-26-2022 at 08:29 AM..
It's not entirely government inflicted because this is happening in multiple nations to varying degrees. I suspect the only way to roll back the inflation will be to suffer through a recession, which will inevitably reduce spending. The economy should return to normal, barring another pandemic.
Quit voting in big spenders who inflate the money supply like Biden and Trump and Obama and Bush and ......
I agree, but the only Presidential candidate there could be that is guaranteed to CUT spending is Rand Paul.
Every time I bring this up, I get several replies stating he's unelectable.
Rand Paul and Tom Massie are the only 2 in DC with proven voting histories of consistently voting down deficit spending....only 2 out of 535.
End all Corp taxes, implement the Penny plan of reducing spending by 1%/yr for 7 years straight, & elect Rand Paul Prez and Thomas Massie VP, if you really want to make America great again.
I agree, but the only Presidential candidate there could be that is guaranteed to CUT spending is Rand Paul.
Every time I bring this up, I get several replies stating he's unelectable.
Rand Paul and Tom Massie are the only 2 in DC with proven voting histories of consistently voting down deficit spending....only 2 out of 535.
End all Corp taxes, implement the Penny plan of reducing spending by 1%/yr for 7 years straight, & elect Rand Paul Prez and Thomas Massie VP, if you really want to make America great again.
He is unelectable because of the other song and dances he performs.
But I would support a moderate candidate that would call for across the board cut of 1%.
It is reasonable.
Having said that. The govt. isnot solely repsonsible for inflation. It is true, the spending in 2020 and 2021 to try and try to boost the economy didn't help.
(Remember the Inflation Reduction Act is less about expenditure and more about handing out 'credits' or cutting taxes or remittances to the govt.....has the same impact as spending more than taking in but not quite the same).
Statistics are showing that corporations are increasing their prices far beyond just inflation rates. THey are padding their bottom line and using the 'inflation' as a smoke screen.
The incrqaase in the bottom line has been rather significant.
Also, restricting global oil reserves has little to do with govt. spending.
I agree, but the only Presidential candidate there could be that is guaranteed to CUT spending is Rand Paul.
Every time I bring this up, I get several replies stating he's unelectable.
Rand Paul and Tom Massie are the only 2 in DC with proven voting histories of consistently voting down deficit spending....only 2 out of 535.
End all Corp taxes, implement the Penny plan of reducing spending by 1%/yr for 7 years straight, & elect Rand Paul Prez and Thomas Massie VP, if you really want to make America great again.
Agreed, though I don't think the 1% is aggressive enough. 3% across the board for a minimum of 10 consecutive years. Plus a mandatory surplus requirement and a maximum tax of no greater than 15%.
But first things first: get rid of all the overlapping programs and various "offices" that serve no purpose or cannot independently be justified based on outcomes.
Companies just add the cost of taxes into their retail prices, so we pay them. Corporation pay them temporarily, until they can recoup the cost when they sell goods or provide services in the future.
In the end, corps pay zero taxes. Its just another pass-through cost to them...passed along to all consumers.
I know, because I own a corporation. When any cost rises (like taxes) I simply increase my prices, so my profits stay the same.
So, how would our gov't get by w/o all those Billions in corp taxes? They reduce spending by 1% across the board.
So, just a 1% fed spending cut, eliminates all the pain consumers are suffering from today.
Is the federal gov't so greedy that they can't reduce spending by just 1% to help American consumers?
Total federal spending is $7.8 trillion. 1% would be $78 billion.
Corporate income tax is 9% of total - $425 billion. A 1% spending cut doesn't come close to making up for the loss of all corporate income tax revenue.
The corporate tax rate dropped from 35% to 21% in 2017 and has remained there. That didn't stop inflation from happening in 2021, so why do you think a complete cut would work?
Actually, spending is way down this year, because all of the covid stimulus of the past couple years is ending. Spending came down a little in 2012, for similar reasons. But before that, the last time federal spending was reduced year over year was 1946.
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