[Quantum_Wizard]

Brenda Brenda:

Which would result in pension plans not being profitable, people owning stock putting their money back under their mattresses etc etc.

No, since the increase in dividend taxes (if done in correct amount) and removal of corporate income tax would offset each other.

[Quantum_Wizard]

Mr_Canada Mr_Canada:

A platform advertised as a "no-brainer" is hardly an encouraging or positive attribute.

"No-brainer" means that the idea is (in their opinion) obvious.

Mr_Canada Mr_Canada:

To nitpick just one of the taxes it suggests; sin taxes solve nothing, and almost do the exact opposite, creating more of the problem, not less. Pet peeve. I get if if the idea is too just profit off self-abuse, but suggesting it reduces said abuse is a pet peeve for me.

They are not talking about taxing self-abuse, but rather taxing things that harm third parties, like pollution for example. Are you claiming that taxing pollution would not reduce pollution? Does not sound convincing to me.

Mr_Canada Mr_Canada:

A society like this would have one motherfucking pissed off underclass. But maybe they're counting on them being too fried for class consciousness.

Remember that some of the economists were liberals/left-wingers. The whole idea of that episode was to find suggestions on which economists across the political spectrum agree.

[Quantum_Wizard]

Lemmy Lemmy:

kilroy kilroy:

I see corporate taxes as a tax on consumption since the person who ultimately pays the tax is the purchaser of the product of the company. The whole argument seems to me to be redundant if not an actual red herring. Companies build into the price of their product the costs of doing the business, including taxes, and tax avoidance costs.

Costs have nothing to do with demand and pricing comes from demand. The notion of "passing the costs on to the customer" isn't supported by economic theory nor empirical research.

You are not correct here. If e.g. demand by consumers is very inelastic, producers can pass most of additional cost to consumers. On the other hand, if e.g. demand is very elastic, producers bear the most of the cost.

[Xort]

andyt andyt:

The insurance has a value, ie a benefit given to the employee that is currently not taxed.

That seems odd, I'm fairly sure I'm taxed for non income benefits.

$1:

20 years ago, the rate for a family to have full coverage was about $3000/month if bought privately.

That seems hugely high given than most nations can deliver health care for about $3,000 a person a year. Even the US is only $7,000 a person a year, for a family of 4 at 3k a month that is almost $2,000 higher then what is spent using statistics from today.

[Quantum_Wizard]

Xort Xort:

andyt andyt:

The insurance has a value, ie a benefit given to the employee that is currently not taxed.

That seems odd, I'm fairly sure I'm taxed for non income benefits.

Generally speaking you are. But employer provided health care has a special exemption in US.

[Quantum_Wizard]

Brenda Brenda:

Quantum_Wizard Quantum_Wizard:

Brenda Brenda:

Corporations are NOT people

Right, they are tools of profit for their owners.

Stake holders. NOT owners.

Or equity holders or whatever. The precise term used matters little. What matters is that the purpose of the corporation is to produce profit for them. Taxing the corporation is essentially taxing the equity holders, much like taxing the dividends.

[Brenda]

I don't necessarily agree. Stake holders/share holders/equity holders are not necessarily in the same country as the corporation is.

[kilroy]

Lemmy Lemmy:

kilroy kilroy:

I see corporate taxes as a tax on consumption since the person who ultimately pays the tax is the purchaser of the product of the company. The whole argument seems to me to be redundant if not an actual red herring. Companies build into the price of their product the costs of doing the business, including taxes, and tax avoidance costs.

Costs have nothing to do with demand and pricing comes from demand. The notion of "passing the costs on to the customer" isn't supported by economic theory nor empirical research.

andyt andyt:

The idea is that if you tax dividends rather than profits, the companies will invest the money back into the business instead of paying dividends to some degree. And since companies pay no income tax, they can't fuck around with the deductions, like the lunches, the trips, the high salaries, etc. The US has one of the highest corporate tax rates in the developed world, but don't rake in that much from it because there are so many deductions available to the companies. Some very profitable companies pay no income tax at all, playing that game. Taxing the dividends at a higher rate means the owners of the companies are taxed more on the profits that flow to them.

I understand that there is a logic behind the argument, I just don't think it stands up. If the company can avoid taxes by all the dodges available, which I did agree earlier would be a good thing for us to change, then the money isn't going to the shareholders anyway. It is basically going back into making the company bigger, less accountable, and more powerful, all of which I think are the wrong direction. Accumulation.

The very purpose is to bring in money for the (majority) stockholders, as indicated by the Mitt Romney experience, production isn't even necessary or desirable, if you can destroy companies and make money doing it that works too. There is no imperative in the make more money credo that creates jobs, increases production, or mandates the trickle down effect.

accumulation is sticking their money under their mattresses. In the end the small investors will be burned by the large investors so it is probably better to deal with our own investments close to home.

Lemmy wrote, "Costs have nothing to do with demand and pricing comes from demand. The notion of "passing the costs on to the customer" isn't supported by economic theory nor empirical research."

Demand is a factor in pricing, but a company that doesn't recoup its costs isn't going to be around long. If the price of a product is massively inflated, so that a small increase to cover tax costs wouldn't be noticed, then the price elasticity that the Quantum Wizard is talking about will as you say be pretty insignificant. On the other hand, if the price is that inflated the profits are probably pretty much high. In which case the taxes, in a non-forgiving tax system would be high too, and elasticity would see consumers thinking again about purchasing. Check out something called the Utility Death Spiral .

[kilroy]

Quantum_Wizard Quantum_Wizard:

kilroy kilroy:

I see corporate taxes as a tax on consumption since the person who ultimately pays the tax is the purchaser of the product of the company. The whole argument seems to me to be redundant if not an actual red herring. Companies build into the price of their product the costs of doing the business, including taxes, and tax avoidance costs.

But same really goes for dividend taxes and the employees income taxes. What you are talking about here is called tax incidence. Generally the corporate income tax will fall on the owners of the company, the employees of the company and the consumer. How precisely depends on elasticities of supply and demand. Same goes for the other taxes mentioned here too.

kilroy kilroy:

As Brenda pointed out, The corporate citizens are created to take the fall when things go up the creek, is it reasonable to expect them to take the good times as well?

Are you asking whether it is fair to the corporations to tax their income? That's not a sensible question, since corporation are just tools.

Well no, sorry, I thought I was asking a rhetorical question. I was asking whether it is reasonable for society to expect that the corporations take the good with the bad. For example, I have a tractor, a tool, to help me make an income, but my tractor can't make it easier for me to withstand a series of bad years by accepting financial responsibility, but if it could I for damn sure wouldn't mind if it would also pay taxes on my income in good years. So there are tools and then there are tools and corporations are of the latter.

Needless to say that my answer to my rhetorical question is yes.

[Public_Domain]

[Lemmy]

Quantum_Wizard Quantum_Wizard:

You are not correct here. If e.g. demand by consumers is very inelastic, producers can pass most of additional cost to consumers. On the other hand, if e.g. demand is very elastic, producers bear the most of the cost.

Uhh, yes I am. Elasticity of demand depends on many factors, including quantity. In other words, all goods have inelastic and elastic segments of their demand curves. If a good is inelastic, all that means is that, over a certain portion of its demand curve, increasing price results in a greater percentage increase in revenue than the percentage change in price.

A consumer doesn't consider costs when it demands. The costs involved in producing a product have ZERO impact on how I desire it. If the asking price of a product is at the maximum of my demand, and the price increases, I stop buying. As a consumer, I don't give a shit about costs. All I care about is the product. Your statement about producers bearing costs versus consumers bearing costs is nonsense. It's true that, if you have an inelastic good you can raise prices and still be in business, but the limit to that comes with consumer demand. You can't price above demand, no matter what your costs are.

[Lemmy]

kilroy kilroy:

Lemmy wrote, "Costs have nothing to do with demand and pricing comes from demand. The notion of "passing the costs on to the customer" isn't supported by economic theory nor empirical research."

Demand is a factor in pricing, but a company that doesn't recoup its costs isn't going to be around long. If the price of a product is massively inflated, so that a small increase to cover tax costs wouldn't be noticed, then the price elasticity that the Quantum Wizard is talking about will as you say be pretty insignificant. On the other hand, if the price is that inflated the profits are probably pretty much high. In which case the taxes, in a non-forgiving tax system would be high too, and elasticity would see consumers thinking again about purchasing. Check out something called the Utility Death Spiral .

That's exactly correct. If you price about your average cost, you'll be out of business plenty quick. But that has nothing to do with the notion of passing costs on to consumers. You can't pass costs on to consumers because cost has no bearing on demand. You can pass PRICE INCREASES on to consumers, depending on elasticity, and still make profit, but those are completely separate and unrelated economic events.

[kilroy]

[quote="Lemmy] That's exactly correct. If you price about your average cost, you'll be out of business plenty quick. But that has nothing to do with the notion of passing costs on to consumers. You can't pass costs on to consumers because cost has no bearing on demand. You can pass PRICE INCREASES on to consumers, depending on elasticity, and still make profit, but those are completely separate and unrelated economic events.[/quote]

In some cases, but in a case where the costs rise sharply, across the spectrum of producers, because for example society decides to increase the returns from taxes received from corporations, the latter have two choices. Ie tire producers decide to accept the hit on their income and pay the taxes out of existing income, or they pass on the cost to customers by raising prices. In the second case the price increase may slow demand but I would still bet that would be the choice.

[Quantum_Wizard]

Lemmy, obviously I didn't mean that consumers care about the cost of production. When you increase a tax on producers they could either not adjust their prices in which case they take a hit in form of having bigger portion of their profits going to taxes, or they can incorporate the increased tax to the prices and take a hit in form of reduced sales. If they face a very inelastic demand, i.e. the amount demanded by consumers doesn't change much when the price changes, then the producers take the smallest hit if they incorporate most of the tax increase into the prices and thus consumers bear most of the burden. If demand is very elastic, the opposite happens.

The Wikipedia page on tax incidence has examples. Do you disagree with what that page says?

[Quantum_Wizard]

Mr_Canada Mr_Canada:

Restrictions on advirtising is what has been detrimental to smoking. Not taxes. Mass awareness programs. I'm not saying awareness isn't an option, that is properly the cure. I have no faith in capitalism to maintain such a position, as perhaps they'd be economically interested in being lighter on advirtising against drugs in favour of more profits. And no, I really see no difference between the corporation and the government getting money from vices and then being put in charge of discouraging use.

Mr_Canada, the suggestion was to tax things like pollution, not tobacco. I'm saying this for the second time.