So given this situation....

A tax is assessed at the corporate level and it produces X amount of revenue and it is passed on to the consumer to one degree or another through the cost of the good.

OR

A tax is assessed at the consumer level that produces the same (X) amount of revenue.

Question: Which of these taxes will result in the consumer having more money in their pocket?


That is my bottom line. If taxing at the corporate level means I have more disposable income because corporations have to absorb at least some of the costs I selfishly want to keep the corporate income tax. If it is a wash I still want to keep the corporate income tax cause I'll at least feel like they are paying some of the burden. If dropping the corporate income tax and taxing me directly leaves me with more disposable income then drop it and I'll pay it directly.

(01-19-2014 03:27 PM)dawgitall Wrote:  So given this situation....

A tax is assessed at the corporate level and it produces X amount of revenue and it is passed on to the consumer to one degree or another through the cost of the good.

OR

A tax is assessed at the consumer level that produces the same (X) amount of revenue.

Question: Which of these taxes will result in the consumer having more money in their pocket?


That is my bottom line. If taxing at the corporate level means I have more disposable income because corporations have to absorb at least some of the costs I selfishly want to keep the corporate income tax. If it is a wash I still want to keep the corporate income tax cause I'll at least feel like they are paying some of the burden. If dropping the corporate income tax and taxing me directly leaves me with more disposable income then drop it and I'll pay it directly.

Removing the most variables and externalities will allow competitive markets to settle on the lowest price.

Tax rates are one of the things that can be adjusted, and they can often change throughout the life of a product. Remove this external uncertainty and you'll see the price of your goods drop, leaving more in your pocket.

However, we don't know how the govt. will choose to make up this loss of tax money.

(01-19-2014 04:39 PM)RaiderATO Wrote:  

(01-19-2014 03:27 PM)dawgitall Wrote:  So given this situation....

A tax is assessed at the corporate level and it produces X amount of revenue and it is passed on to the consumer to one degree or another through the cost of the good.

OR

A tax is assessed at the consumer level that produces the same (X) amount of revenue.

Question: Which of these taxes will result in the consumer having more money in their pocket?


That is my bottom line. If taxing at the corporate level means I have more disposable income because corporations have to absorb at least some of the costs I selfishly want to keep the corporate income tax. If it is a wash I still want to keep the corporate income tax cause I'll at least feel like they are paying some of the burden. If dropping the corporate income tax and taxing me directly leaves me with more disposable income then drop it and I'll pay it directly.

Removing the most variables and externalities will allow competitive markets to settle on the lowest price.

Tax rates are one of the things that can be adjusted, and they can often change throughout the life of a product. Remove this external uncertainty and you'll see the price of your goods drop, leaving more in your pocket.

However, we don't know how the govt. will choose to make up this loss of tax money.

Eliminating corporate income taxes doesn't mean those cost savings get passed along to consumers. As Hitch (thank god) mentioned before, the demand elasticity of the product will tell how much of the eliminated corporate tax is passed on to consumers and how much will go to corporate owners in the form of higher profits.

This is, of course, the flip side of higher corporate taxes. The demand elasticity there tells how much of the increased tax will be passed to the consumer and how much will be absorbed by corporate owners in form of lower profits.

(01-19-2014 09:49 AM)UM2001GRAD Wrote:  As for Owl's back-peddling, he's still being disingenuous.

Your unsubstantiated ad hominem attacks are tiresome, but I don't respect you enough to care what you think.

(01-19-2014 07:18 PM)Owl 69/70/75 Wrote:  

(01-19-2014 09:49 AM)UM2001GRAD Wrote:  As for Owl's back-peddling, he's still being disingenuous.

Your unsubstantiated ad hominem attacks are tiresome, but I don't respect you enough to care what you think.

What you choose to respond to in these posts tells everyone what they need to know about your subject matter knowledge. You're pathetic.

(01-19-2014 06:39 PM)UM2001GRAD Wrote:  

(01-19-2014 04:39 PM)RaiderATO Wrote:  

(01-19-2014 03:27 PM)dawgitall Wrote:  So given this situation....

A tax is assessed at the corporate level and it produces X amount of revenue and it is passed on to the consumer to one degree or another through the cost of the good.

OR

A tax is assessed at the consumer level that produces the same (X) amount of revenue.

Question: Which of these taxes will result in the consumer having more money in their pocket?


That is my bottom line. If taxing at the corporate level means I have more disposable income because corporations have to absorb at least some of the costs I selfishly want to keep the corporate income tax. If it is a wash I still want to keep the corporate income tax cause I'll at least feel like they are paying some of the burden. If dropping the corporate income tax and taxing me directly leaves me with more disposable income then drop it and I'll pay it directly.

Removing the most variables and externalities will allow competitive markets to settle on the lowest price.

Tax rates are one of the things that can be adjusted, and they can often change throughout the life of a product. Remove this external uncertainty and you'll see the price of your goods drop, leaving more in your pocket.

However, we don't know how the govt. will choose to make up this loss of tax money.

Eliminating corporate income taxes doesn't mean those cost savings get passed along to consumers. As Hitch (thank god) mentioned before, the demand elasticity of the product will tell how much of the eliminated corporate tax is passed on to consumers and how much will go to corporate owners in the form of higher profits.

This is, of course, the flip side of higher corporate taxes. The demand elasticity there tells how much of the increased tax will be passed to the consumer and how much will be absorbed by corporate owners in form of lower profits.

Yes, the unpredictability cuts both ways. But, like I said having more certainty in their expenses will lead to a more "perfect" market. One other external variable has been removed, there will be more confidence in pricing and competition will be able to lower the sales price even more because they can more accurately predict their expenses.

Successful companies are more often than not on the winning end of this uncertainty (consumers on the losing end). This would benefit the consumer more.

(01-19-2014 08:24 PM)RaiderATO Wrote:  

(01-19-2014 06:39 PM)UM2001GRAD Wrote:  

(01-19-2014 04:39 PM)RaiderATO Wrote:  

(01-19-2014 03:27 PM)dawgitall Wrote:  So given this situation....

A tax is assessed at the corporate level and it produces X amount of revenue and it is passed on to the consumer to one degree or another through the cost of the good.

OR

A tax is assessed at the consumer level that produces the same (X) amount of revenue.

Question: Which of these taxes will result in the consumer having more money in their pocket?


That is my bottom line. If taxing at the corporate level means I have more disposable income because corporations have to absorb at least some of the costs I selfishly want to keep the corporate income tax. If it is a wash I still want to keep the corporate income tax cause I'll at least feel like they are paying some of the burden. If dropping the corporate income tax and taxing me directly leaves me with more disposable income then drop it and I'll pay it directly.

Removing the most variables and externalities will allow competitive markets to settle on the lowest price.

Tax rates are one of the things that can be adjusted, and they can often change throughout the life of a product. Remove this external uncertainty and you'll see the price of your goods drop, leaving more in your pocket.

However, we don't know how the govt. will choose to make up this loss of tax money.

Eliminating corporate income taxes doesn't mean those cost savings get passed along to consumers. As Hitch (thank god) mentioned before, the demand elasticity of the product will tell how much of the eliminated corporate tax is passed on to consumers and how much will go to corporate owners in the form of higher profits.

This is, of course, the flip side of higher corporate taxes. The demand elasticity there tells how much of the increased tax will be passed to the consumer and how much will be absorbed by corporate owners in form of lower profits.

Yes, the unpredictability cuts both ways. But, like I said having more certainty in their expenses will lead to a more "perfect" market. One other external variable has been removed, there will be more confidence in pricing and competition will be able to lower the sales price even more because they can more accurately predict their expenses.

Successful companies are more often than not on the winning end of this uncertainty (consumers on the losing end). This would benefit the consumer more.

I said nothing about unpredictability because tax expenses are very predictable. Pretty much everything you said is sheer fantasy.

(01-19-2014 07:31 PM)UM2001GRAD Wrote:  

(01-19-2014 07:18 PM)Owl 69/70/75 Wrote:  

(01-19-2014 09:49 AM)UM2001GRAD Wrote:  As for Owl's back-peddling, he's still being disingenuous.

Your unsubstantiated ad hominem attacks are tiresome, but I don't respect you enough to care what you think.

What you choose to respond to in these posts tells everyone what they need to know about your subject matter knowledge. You're pathetic.

I think most people on this and other threads have made it pretty clear how much respect they have for my ideas--and yours.

And your examples all fail in the long run. Nobody keeps losing money forever. I may get caught in a short-term situation where I can't recover taxes, but I won't stay there. That's the problem with your neo-Keynesian viewpoint. You think you understand demand, but you don't have a clue how the supply side works. For the record, neither do "trickle down" advocates.

(01-19-2014 08:54 PM)Owl 69/70/75 Wrote:  

(01-19-2014 07:31 PM)UM2001GRAD Wrote:  

(01-19-2014 07:18 PM)Owl 69/70/75 Wrote:  

(01-19-2014 09:49 AM)UM2001GRAD Wrote:  As for Owl's back-peddling, he's still being disingenuous.

Your unsubstantiated ad hominem attacks are tiresome, but I don't respect you enough to care what you think.

What you choose to respond to in these posts tells everyone what they need to know about your subject matter knowledge. You're pathetic.

I think most people on this and other threads have made it pretty clear how much respect they have for my ideas--and yours.

And your examples all fail in the long run. Nobody keeps losing money forever. I may get caught in a short-term situation where I can't recover taxes, but I won't stay there. That's the problem with your neo-Keynesian viewpoint. You think you understand demand, but you don't have a clue how the supply side works. For the record, neither do "trickle down" advocates.

I'm being generous by saying that you're being disingenuous. That implies that you actually understand the topic when it's more likely that you simply don't understand the topic.

(01-19-2014 04:39 PM)RaiderATO Wrote:  

(01-19-2014 03:27 PM)dawgitall Wrote:  So given this situation....

A tax is assessed at the corporate level and it produces X amount of revenue and it is passed on to the consumer to one degree or another through the cost of the good.

OR

A tax is assessed at the consumer level that produces the same (X) amount of revenue.

Question: Which of these taxes will result in the consumer having more money in their pocket?


That is my bottom line. If taxing at the corporate level means I have more disposable income because corporations have to absorb at least some of the costs I selfishly want to keep the corporate income tax. If it is a wash I still want to keep the corporate income tax cause I'll at least feel like they are paying some of the burden. If dropping the corporate income tax and taxing me directly leaves me with more disposable income then drop it and I'll pay it directly.

Removing the most variables and externalities will allow competitive markets to settle on the lowest price.

Tax rates are one of the things that can be adjusted, and they can often change throughout the life of a product. Remove this external uncertainty and you'll see the price of your goods drop, leaving more in your pocket.

However, we don't know how the govt. will choose to make up this loss of tax money.

Yes but will that money in my pocket be taken from me (and then some) when the government imposes a direct consumer tax to make up for the lost revenue? That is my question.

(01-19-2014 09:04 PM)UM2001GRAD Wrote:  I'm being generous by saying that you're being disingenuous. That implies that you actually understand the topic when it's more likely that you simply don't understand the topic.

The good thing about discussions with Grad is that you know that you've won when he abandons substantive argument for ad hominem attacks.

(01-19-2014 09:04 PM)UM2001GRAD Wrote:  

(01-19-2014 08:54 PM)Owl 69/70/75 Wrote:  

(01-19-2014 07:31 PM)UM2001GRAD Wrote:  

(01-19-2014 07:18 PM)Owl 69/70/75 Wrote:  

(01-19-2014 09:49 AM)UM2001GRAD Wrote:  As for Owl's back-peddling, he's still being disingenuous.

Your unsubstantiated ad hominem attacks are tiresome, but I don't respect you enough to care what you think.

What you choose to respond to in these posts tells everyone what they need to know about your subject matter knowledge. You're pathetic.

I think most people on this and other threads have made it pretty clear how much respect they have for my ideas--and yours.

And your examples all fail in the long run. Nobody keeps losing money forever. I may get caught in a short-term situation where I can't recover taxes, but I won't stay there. That's the problem with your neo-Keynesian viewpoint. You think you understand demand, but you don't have a clue how the supply side works. For the record, neither do "trickle down" advocates.

I'm being generous by saying that you're being disingenuous. That implies that you actually understand the topic when it's more likely that you simply don't understand the topic.

The disingenuous thing is that you are trying to convince people that elimination of corporate taxation would not benefit the consumer in the long run more than the corporation. No matter how you manage to frame the debate...businesses pass on as much of their tax burden as possible to the consumer. This is undeniable.

(01-20-2014 05:24 AM)Owl 69/70/75 Wrote:  

(01-19-2014 09:04 PM)UM2001GRAD Wrote:  I'm being generous by saying that you're being disingenuous. That implies that you actually understand the topic when it's more likely that you simply don't understand the topic.

The good thing about discussions with Grad is that you know that you've won when he abandons substantive argument for ad hominem attacks.

Companies getting more efficient and productive in response to an inability to pass along increases in taxes isn't the same as recovering all those taxes from consumers. Are you seriously stupid enough to think it is? This is why I say you are disingenuous. I'm assuming you're not really that stupid.

(01-20-2014 06:37 AM)Fo Shizzle Wrote:  

(01-19-2014 09:04 PM)UM2001GRAD Wrote:  

(01-19-2014 08:54 PM)Owl 69/70/75 Wrote:  

(01-19-2014 07:31 PM)UM2001GRAD Wrote:  

(01-19-2014 07:18 PM)Owl 69/70/75 Wrote:  Your unsubstantiated ad hominem attacks are tiresome, but I don't respect you enough to care what you think.

What you choose to respond to in these posts tells everyone what they need to know about your subject matter knowledge. You're pathetic.

I think most people on this and other threads have made it pretty clear how much respect they have for my ideas--and yours.

And your examples all fail in the long run. Nobody keeps losing money forever. I may get caught in a short-term situation where I can't recover taxes, but I won't stay there. That's the problem with your neo-Keynesian viewpoint. You think you understand demand, but you don't have a clue how the supply side works. For the record, neither do "trickle down" advocates.

I'm being generous by saying that you're being disingenuous. That implies that you actually understand the topic when it's more likely that you simply don't understand the topic.

The disingenuous thing is that you are trying to convince people that elimination of corporate taxation would not benefit the consumer in the long run more than the corporation. No matter how you manage to frame the debate...businesses pass on as much of their tax burden as possible to the consumer. This is undeniable.

If they can't pass on the expense of taxes to the consumer, only a few outcomes are available. 1. They live with smaller profits meaning the company is less valuable. 2. If they are a large enough entity and the product can be made elsewhere, they move the jobs offshore (big outfits running the gamut from Nike to GE have done this in a big way) 3. If competition is such that they can't raise the price and their profit margin is too small, they become unprofitable and go out of business. 4) They automate the means of production as a cost cutting measure offsetting the larger tax burden.

Items 2, 3, and 4 all lead to less jobs, and given that manufacturing jobs are what really drives a thriving middle class - I view all of these as undesirable outcomes. Item 1 doesn't impact the middle class as directly, but it leads to things like smaller R&D budgets, less timely equipment overhauls, less purchasing of new equipment, etc.

Now, do I believe that what a lot of CEO's get paid is way too much, yep.

(01-19-2014 11:19 PM)dawgitall Wrote:  

(01-19-2014 04:39 PM)RaiderATO Wrote:  

(01-19-2014 03:27 PM)dawgitall Wrote:  So given this situation....

A tax is assessed at the corporate level and it produces X amount of revenue and it is passed on to the consumer to one degree or another through the cost of the good.

OR

A tax is assessed at the consumer level that produces the same (X) amount of revenue.

Question: Which of these taxes will result in the consumer having more money in their pocket?


That is my bottom line. If taxing at the corporate level means I have more disposable income because corporations have to absorb at least some of the costs I selfishly want to keep the corporate income tax. If it is a wash I still want to keep the corporate income tax cause I'll at least feel like they are paying some of the burden. If dropping the corporate income tax and taxing me directly leaves me with more disposable income then drop it and I'll pay it directly.

Removing the most variables and externalities will allow competitive markets to settle on the lowest price.

Tax rates are one of the things that can be adjusted, and they can often change throughout the life of a product. Remove this external uncertainty and you'll see the price of your goods drop, leaving more in your pocket.

However, we don't know how the govt. will choose to make up this loss of tax money.

Yes but will that money in my pocket be taken from me (and then some) when the government imposes a direct consumer tax to make up for the lost revenue? That is my question.

I'm going to make an assumption here and we know what happens when we assume. Please respond as to how accurate or inaccurate that assumption might be.

With total tax revenue being equal, when some taxes are collected through the corporate income tax consumers end up with more disposable income. This is because in some cases the entire cost of the corporate tax is not passed on to the consumer. Also if consumers are taxed directly each consumer pays while if the tax goes through the corporate route you pay only upon use of the products.

(01-20-2014 10:20 AM)Crebman Wrote:  

(01-20-2014 06:37 AM)Fo Shizzle Wrote:  

(01-19-2014 09:04 PM)UM2001GRAD Wrote:  

(01-19-2014 08:54 PM)Owl 69/70/75 Wrote:  

(01-19-2014 07:31 PM)UM2001GRAD Wrote:  What you choose to respond to in these posts tells everyone what they need to know about your subject matter knowledge. You're pathetic.

I think most people on this and other threads have made it pretty clear how much respect they have for my ideas--and yours.

And your examples all fail in the long run. Nobody keeps losing money forever. I may get caught in a short-term situation where I can't recover taxes, but I won't stay there. That's the problem with your neo-Keynesian viewpoint. You think you understand demand, but you don't have a clue how the supply side works. For the record, neither do "trickle down" advocates.

I'm being generous by saying that you're being disingenuous. That implies that you actually understand the topic when it's more likely that you simply don't understand the topic.

The disingenuous thing is that you are trying to convince people that elimination of corporate taxation would not benefit the consumer in the long run more than the corporation. No matter how you manage to frame the debate...businesses pass on as much of their tax burden as possible to the consumer. This is undeniable.

If they can't pass on the expense of taxes to the consumer, only a few outcomes are available. 1. They live with smaller profits meaning the company is less valuable. 2. If they are a large enough entity and the product can be made elsewhere, they move the jobs offshore (big outfits running the gamut from Nike to GE have done this in a big way) 3. If competition is such that they can't raise the price and their profit margin is too small, they become unprofitable and go out of business. 4) They automate the means of production as a cost cutting measure offsetting the larger tax burden.

Items 2, 3, and 4 all lead to less jobs, and given that manufacturing jobs are what really drives a thriving middle class - I view all of these as undesirable outcomes. Item 1 doesn't impact the middle class as directly, but it leads to things like smaller R&D budgets, less timely equipment overhauls, less purchasing of new equipment, etc.

Now, do I believe that what a lot of CEO's get paid is way too much, yep.

Scenario 1 is a possibility. Scenario 3 is not because taxes only apply to profits. If a company isn't profitable, then they don't pay corporate income taxes. Scenarios 2 and 4 apply regardless of the tax rate. Companies offshore and automate in order to slash labor costs. Corporations want American workers to compete with laborers who are willing (or are forced) to work for a few dollars a day. Don't be their fool and believe that a few percentage points in the tax code is sinking the middle class. It's free trade agreements and the destruction of organized labor that's doing those things. And who leads the charge for more unfair free trade agreements and the further destruction of organized labor in America? Corporate interests. And who leads the charge for lower corporate taxes? Corporate interests. Don't believe for a second that they are thinking about consumers or the middle class. They don't give a damn about either.

(01-19-2014 11:19 PM)dawgitall Wrote:  

(01-19-2014 04:39 PM)RaiderATO Wrote:  

(01-19-2014 03:27 PM)dawgitall Wrote:  So given this situation....

A tax is assessed at the corporate level and it produces X amount of revenue and it is passed on to the consumer to one degree or another through the cost of the good.

OR

A tax is assessed at the consumer level that produces the same (X) amount of revenue.

Question: Which of these taxes will result in the consumer having more money in their pocket?


That is my bottom line. If taxing at the corporate level means I have more disposable income because corporations have to absorb at least some of the costs I selfishly want to keep the corporate income tax. If it is a wash I still want to keep the corporate income tax cause I'll at least feel like they are paying some of the burden. If dropping the corporate income tax and taxing me directly leaves me with more disposable income then drop it and I'll pay it directly.

Removing the most variables and externalities will allow competitive markets to settle on the lowest price.

Tax rates are one of the things that can be adjusted, and they can often change throughout the life of a product. Remove this external uncertainty and you'll see the price of your goods drop, leaving more in your pocket.

However, we don't know how the govt. will choose to make up this loss of tax money.

Yes but will that money in my pocket be taken from me (and then some) when the government imposes a direct consumer tax to make up for the lost revenue? That is my question.

I can't predict what govt. will do, but.... Assuming this is tax-revenue neutral, the more perfect competition will drive prices down which will lower margins, leaving more in your pocket and less in the business' coffers.

However, one move by the govt. this way or that way can and will change the equation. I'd strive for simplicity and taxation that is more open and visible. I think it is important to know where each bit of your money is going, and that includes the taxes on what you purchase. No need for the shell game to continue or expand.

(01-20-2014 10:34 AM)UM2001GRAD Wrote:  

(01-20-2014 10:20 AM)Crebman Wrote:  

(01-20-2014 06:37 AM)Fo Shizzle Wrote:  

(01-19-2014 09:04 PM)UM2001GRAD Wrote:  

(01-19-2014 08:54 PM)Owl 69/70/75 Wrote:  I think most people on this and other threads have made it pretty clear how much respect they have for my ideas--and yours.

And your examples all fail in the long run. Nobody keeps losing money forever. I may get caught in a short-term situation where I can't recover taxes, but I won't stay there. That's the problem with your neo-Keynesian viewpoint. You think you understand demand, but you don't have a clue how the supply side works. For the record, neither do "trickle down" advocates.

I'm being generous by saying that you're being disingenuous. That implies that you actually understand the topic when it's more likely that you simply don't understand the topic.

The disingenuous thing is that you are trying to convince people that elimination of corporate taxation would not benefit the consumer in the long run more than the corporation. No matter how you manage to frame the debate...businesses pass on as much of their tax burden as possible to the consumer. This is undeniable.

If they can't pass on the expense of taxes to the consumer, only a few outcomes are available. 1. They live with smaller profits meaning the company is less valuable. 2. If they are a large enough entity and the product can be made elsewhere, they move the jobs offshore (big outfits running the gamut from Nike to GE have done this in a big way) 3. If competition is such that they can't raise the price and their profit margin is too small, they become unprofitable and go out of business. 4) They automate the means of production as a cost cutting measure offsetting the larger tax burden.

Items 2, 3, and 4 all lead to less jobs, and given that manufacturing jobs are what really drives a thriving middle class - I view all of these as undesirable outcomes. Item 1 doesn't impact the middle class as directly, but it leads to things like smaller R&D budgets, less timely equipment overhauls, less purchasing of new equipment, etc.

Now, do I believe that what a lot of CEO's get paid is way too much, yep.

Scenario 1 is a possibility. Scenario 3 is not because taxes only apply to profits. If a company isn't profitable, then they don't pay corporate income taxes. Scenarios 2 and 4 apply regardless of the tax rate. Companies offshore and automate in order to slash labor costs. Corporations want American workers to compete with laborers who are willing (or are forced) to work for a few dollars a day. Don't be their fool and believe that a few percentage points in the tax code is sinking the middle class. It's free trade agreements and the destruction of organized labor that's doing those things. And who leads the charge for more unfair free trade agreements and the further destruction of organized labor in America? Corporate interests. And who leads the charge for lower corporate taxes? Corporate interests. Don't believe for a second that they are thinking about consumers or the middle class. They don't give a damn about either.

If you operate under the assumption that we live in a global economy today, free trade agreements obviously affect where corporations decide to make their products. All organized labor does, as it currently operates, is hasten companies moving to places where it doesn't exist - it could be domestic or foreign. There are plenty of costs associated with unions that aren't directly pay related that, in the end, still cost money.

My point is that if we want businesses to stay in the US or attract new businesses here, what we don't want to do is make other places more attractive than here - and corporate tax rates are part of the equation - because, just as you said, the middle class isn't what drives corporate decisions. Consumers they absolutely do consider insomuch as if they turn them off too much, they don't buy their products unless they produce something no one else has. Offshoring and automating cost money. The greater the pressure on the bottom line, the more vigorously a company looks at doing both.

I actually thing Income Tax be it corporate or personal isn't the best way to raise government revenue. All it does is give power to those in Washington to pick winners and losers.

(01-20-2014 11:48 AM)Crebman Wrote:  

(01-20-2014 10:34 AM)UM2001GRAD Wrote:  

(01-20-2014 10:20 AM)Crebman Wrote:  

(01-20-2014 06:37 AM)Fo Shizzle Wrote:  

(01-19-2014 09:04 PM)UM2001GRAD Wrote:  I'm being generous by saying that you're being disingenuous. That implies that you actually understand the topic when it's more likely that you simply don't understand the topic.

The disingenuous thing is that you are trying to convince people that elimination of corporate taxation would not benefit the consumer in the long run more than the corporation. No matter how you manage to frame the debate...businesses pass on as much of their tax burden as possible to the consumer. This is undeniable.

If they can't pass on the expense of taxes to the consumer, only a few outcomes are available. 1. They live with smaller profits meaning the company is less valuable. 2. If they are a large enough entity and the product can be made elsewhere, they move the jobs offshore (big outfits running the gamut from Nike to GE have done this in a big way) 3. If competition is such that they can't raise the price and their profit margin is too small, they become unprofitable and go out of business. 4) They automate the means of production as a cost cutting measure offsetting the larger tax burden.

Items 2, 3, and 4 all lead to less jobs, and given that manufacturing jobs are what really drives a thriving middle class - I view all of these as undesirable outcomes. Item 1 doesn't impact the middle class as directly, but it leads to things like smaller R&D budgets, less timely equipment overhauls, less purchasing of new equipment, etc.

Now, do I believe that what a lot of CEO's get paid is way too much, yep.

Scenario 1 is a possibility. Scenario 3 is not because taxes only apply to profits. If a company isn't profitable, then they don't pay corporate income taxes. Scenarios 2 and 4 apply regardless of the tax rate. Companies offshore and automate in order to slash labor costs. Corporations want American workers to compete with laborers who are willing (or are forced) to work for a few dollars a day. Don't be their fool and believe that a few percentage points in the tax code is sinking the middle class. It's free trade agreements and the destruction of organized labor that's doing those things. And who leads the charge for more unfair free trade agreements and the further destruction of organized labor in America? Corporate interests. And who leads the charge for lower corporate taxes? Corporate interests. Don't believe for a second that they are thinking about consumers or the middle class. They don't give a damn about either.

If you operate under the assumption that we live in a global economy today, free trade agreements obviously affect where corporations decide to make their products. All organized labor does, as it currently operates, is hasten companies moving to places where it doesn't exist - it could be domestic or foreign. There are plenty of costs associated with unions that aren't directly pay related that, in the end, still cost money.

My point is that if we want businesses to stay in the US or attract new businesses here, what we don't want to do is make other places more attractive than here - and corporate tax rates are part of the equation - because, just as you said, the middle class isn't what drives corporate decisions. Consumers they absolutely do consider insomuch as if they turn them off too much, they don't buy their products unless they produce something no one else has. Offshoring and automating cost money. The greater the pressure on the bottom line, the more vigorously a company looks at doing both.

I actually thing Income Tax be it corporate or personal isn't the best way to raise government revenue. All it does is give power to those in Washington to pick winners and losers.

I am more than happy to engage in this discussion with you because it is an interesting one. However, let's not move on to this until we can say we've settled the initial question. Are we in agreement that corporate taxes are not completely passed on to the consumer? Because if you, or anyone else says they are completely passed on, then your new line of inquiry become moot. If corporations can completely pass on their corporate tax burdens to the consumer, then they wouldn't care what that tax level is because they don't ultimately bear it.

So are we finally in agreement that some portion of corporate income taxes, as dictated by demand elasticities, is borne by the owners of the corporation rather than the consumer?

(01-21-2014 12:32 PM)UM2001GRAD Wrote:  

(01-20-2014 11:48 AM)Crebman Wrote:  If you operate under the assumption that we live in a global economy today, free trade agreements obviously affect where corporations decide to make their products. All organized labor does, as it currently operates, is hasten companies moving to places where it doesn't exist - it could be domestic or foreign. There are plenty of costs associated with unions that aren't directly pay related that, in the end, still cost money.
My point is that if we want businesses to stay in the US or attract new businesses here, what we don't want to do is make other places more attractive than here - and corporate tax rates are part of the equation - because, just as you said, the middle class isn't what drives corporate decisions. Consumers they absolutely do consider insomuch as if they turn them off too much, they don't buy their products unless they produce something no one else has. Offshoring and automating cost money. The greater the pressure on the bottom line, the more vigorously a company looks at doing both.
I actually thing Income Tax be it corporate or personal isn't the best way to raise government revenue. All it does is give power to those in Washington to pick winners and losers.

I am more than happy to engage in this discussion with you because it is an interesting one. However, let's not move on to this until we can say we've settled the initial question. Are we in agreement that corporate taxes are not completely passed on to the consumer? Because if you, or anyone else says they are completely passed on, then your new line of inquiry become moot. If corporations can completely pass on their corporate tax burdens to the consumer, then they wouldn't care what that tax level is because they don't ultimately bear it.
So are we finally in agreement that some portion of corporate income taxes, as dictated by demand elasticities, is borne by the owners of the corporation rather than the consumer?

I agree that this is a more interesting topic and would like to discuss.

As for your precondition, you've moved the goal posts quite a bit during this discussion. Your initial comment was that it was "largely untrue" that corporations recovered corporate taxes from customers. In support of this premise you cited a couple of examples where specific market conditions would prevent one or more--but not necessarily all--corporations from recoving 100% of their costs including taxes. First, citing isolated exceptions hardly supports the kind of sweeping point you made initially. Second, in repsonse to the comment that corporations faced with such situations would take corrective actions, you appeared to agree. Now you appear to be claiming that unless all corporations recover 100% of their taxes from customers, that we should all fully agree with your original statement.

I would say that what you have established is that the original statement is "true with exceptions." There's a big gap between that and "largely untrue." You haven't bridged that gap.

And you've attempted to manipulate the argument to require anyone who disagrees with "largely untrue" to prove "true with no exceptions." That's both dishonest and disingenuous.

One place where corportions DO care about tax levels is when competitors get a better deal. Right now if those competitors are in other developed countries--as many are in a global economy--they do generally get a better deal on taxes. A US corporation with such foreign competition does have to eat some of its taxes. So it move operations offshore to avoid the problem. Yes, offshoring is done at times to get cheaper labor or less restricitve regulation. But there are jobs moving to countries with comparable labor and regulatory costs, but cheaper taxes.

It should be noted that there are also jobs moving back, despite cheaper labor and regulatory costs, often because that cheaper labor is unable to execute the tasks needed. That suggests an opportunity window that we should be seeking to be well-placed to exploit. How would you propose to make the US more attractive to investors in such situations? Lower wages? Nope. Lax regulations allowing dirty air or dirty water or unsafe working conditions? I would hope not. A more advantageous tax code? Certainly a better option than the other two. That's why both Bowles-Simpson and Domenici-Rivlin recommended lowering tax rates while closing loopholes as a way to increase tax revenues.