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Posted on 11/8/17 at 2:17 pm to HailHailtoMichigan!
I hear similarly dumb word games from mutualists who want to transform everything into a worker-owned co-op. "Corporations don't even really exist maaaannn" isn't very convincing then or now.
This post was edited on 11/8/17 at 2:18 pm
Posted on 11/8/17 at 2:19 pm to HailHailtoMichigan!
quote:
People, flesh and blood, pay taxes.
LINK
the company itself is not paying the tax.
so it is incorrect to think of a corporate tax as a tax on capital, IYV?
Posted on 11/8/17 at 2:20 pm to GRTiger
quote:
I happen to think my employer is well above average when it comes to employee compensation and the treatment of its employees in general, but I know for a fact it isn't the only employer who acts like that. Many individuals will benefit from their employer's tax savings. It pisses me off that folks are trying to kill this simply due to partisan leanings.
Every bill has to deal with partisanship. That said, I think there are legitimate fiscal concerns here. $1.7 billion over 10 years is a lot to make up for through alleged growth. And that's assuming we can find a way to come out neutral. Does nothing to address the current deficit level and long-term debt. If this tax cut doesn't live up to its laffer curve expectations, the next generation is gonna be fricked
Posted on 11/8/17 at 2:22 pm to Iosh
That's fine. The point of this thread, which I derailed by going too abstract, is to discuss the incidence of the corporate income tax.
People used to think it was borne by capital, but a decent stack of literature now says labor pays a decent portion.
People used to think it was borne by capital, but a decent stack of literature now says labor pays a decent portion.
Posted on 11/8/17 at 2:23 pm to HailHailtoMichigan!
quote:
The point of this thread, which I derailed by going too abstract, is to discuss the incidence of the corporate income tax.
Can we go a step further and acknowledge that the point of discussing incidence of the corporate tax is to defend the position that cutting it would actually be a tax cut for workers?
That is the point, yes?
Posted on 11/8/17 at 2:27 pm to 90proofprofessional
quote:
Can we go a step further and acknowledge that the point of discussing incidence of the corporate tax is to defend the position that cutting it would actually be a tax cut for workers?
Sure, and this is where I get lost in the literature, to be honest. Let's say there are 2 periods, one before the corp tax, one after. I understand why a company can pass on their tax bill to workers in the form of lower wages. What I can't understand in my mind, intuitively, is why cutting the corp tax rate would incentivize them to raise the wages back to what they were before the corp tax was levied.
Posted on 11/8/17 at 2:37 pm to HailHailtoMichigan!
quote:
Sure, and this is where I get lost in the literature, to be honest. Let's say there are 2 periods, one before the corp tax, one after. I understand why a company can pass on their tax bill to workers in the form of lower wages. What I can't understand in my mind, intuitively, is why cutting the corp tax rate would incentivize them to raise the wages back to what they were before the corp tax was levied.
The theory would be that investors interested in profitability would incentivize the company to use tax savings to increase wages, thus attracting better talent and/or compelling better employee performance, which would also drive profitability. I guess.
Posted on 11/8/17 at 2:47 pm to HailHailtoMichigan!
quote:
a company can pass on their tax bill to workers in the form of lower wages. What I can't understand in my mind, intuitively, is why cutting the corp tax rate would incentivize them to raise the wages back to what they were before the corp tax was levied
the missing element in both periods is the consideration of whether the employer can get away with passing the tax onto lower wages (and whether they can survive the tax if they can't do that), and whether they can get away with holding on to a windfall from a tax cut
the condition that would bind them would be a truly competitive labor market, as the article brings up. is that market efficient, or is there evidence that one side holds more market power than the other? if one does- say the employer (labor demand side)- you will see marginal cost of an employee (wage) diverge from marginal benefit, tilted in the favor of the corporation
this possibility is why you see libs posting charts like this :
This post was edited on 11/8/17 at 2:49 pm
Posted on 11/8/17 at 4:29 pm to HailHailtoMichigan!
quote:US corporate tax is a ~39% internal tariff.
Corporate income tax is borne primarily by labor and workers, research shows.
Important to remember when debating tax reform.
Think about that.
A 39% tariff!
Posted on 11/8/17 at 4:30 pm to HailHailtoMichigan!
This conclusion required absolutely zero research. It only required a brain
Posted on 11/8/17 at 5:12 pm to 90proofprofessional
quote:
I think you are overstating what that article argues to the point of contradicting yourself.
quote:
Corporations do not pay taxes. They collect them.
How could the above be correct if:
quote:
labor, through reduced wages, pay 45-75%
instead of 100%?
I'm somewhat interested in this. I took a quick glance at the Tax Foundation report and noticed they were citing some well-known papers. Though, what I'm more interested in is how they parsed out the effects.
Posted on 11/8/17 at 7:09 pm to Jyrdis
not sure what you're asking. was it answered at some point in the thread?
eta: this was the best-looking recent thing I've seen on this. they updated it last summer and i don't know how you could really throw down on the method, but maybe you do LINK
eta: this was the best-looking recent thing I've seen on this. they updated it last summer and i don't know how you could really throw down on the method, but maybe you do LINK
This post was edited on 11/8/17 at 7:22 pm
Posted on 11/8/17 at 7:26 pm to TBoy
You asked the wrong guy because the better I do the bigger bonuses I give out. Ask my people.
quote]
Correct. What they actually do is everything. They don't have to give it to their employees. In fact, it is unlikely that they will chose to give it to their employees.
Let's say I will give you $1 million, no strings attached. Will you chose to give it away to people who have helped you? Or will you put it in your own pockets?
The idea that tax cuts get passed on to workers is kind of ridiculous.[/quote]
I also look for ways to improve my company. I might promote someone, provide them with a truck, buy that new copy machine, fix up the office, etc. I might plan for the future.
I could also invest the money, buy bonds, stocks, etc. I won't bury my profits in the back yard.
Posted on 11/8/17 at 7:28 pm to doubleb
quote:
The idea that tax cuts get passed on to workers is kind of ridiculous.[/quote
Oh look. Another liberal who doesn't understand business or economics
Here's my shocked face
Posted on 11/8/17 at 10:54 pm to ShortyRob
No, I sort of agree. There is no inherent reason a business with more profit is going to pay its workers more, unless competition for labor increases.
Posted on 11/9/17 at 8:10 am to HailHailtoMichigan!
quote:not for nothing but how did you even write the above sentence and not see the problem?
No, I sort of agree. There is no inherent reason a business with more profit is going to pay its workers more, unless competition for labor increases.
I really don't understand how people don't get economics. Your average 12 year old with a lemonade stand understand economics better than your average American adult
If I and all of my competitors suddenly have more money in our pockets then that means we all have more available to pay our employees. I know this doesn't mean we will just suddenly start handing out pay raises
But economics 101 here buddy. The next time I have to hire somebody I will be competing for the best employees with all of my competitors who also have more money in their pockets.
I also find it funny how no one's seems to understand the economic effects of a company having more money but they perfectly well understand the economic effects of a company having less
If all companies suddenly have less money they may not reduce pay for their current employees but they will have less available to hire more employees and when they do hire more employees they won't have as much to hire them with
I am so over how fricking economically ignorant 90% of America is. I would venture to say virtually every problem in America stems from that reality
Posted on 11/9/17 at 8:22 am to ShortyRob
And it really gets down to this; who do you trust having more dollars to spend; private companies and individuals or govt.????
We have seen how with govt. it is nearly enough no matter how much revenues they have especially at the Federal level.
And I see on a regular basis that large companies doing well expand, improve their companies and hire. The same with small businesses like myself.
The choice is clear, keep as many dollars in the private sector and have govt. make it easier for companies to spend the profits and expand their businesses and improve their businesses. Good workers will be in demand. Wages will rise. More people get hired.
We have seen how with govt. it is nearly enough no matter how much revenues they have especially at the Federal level.
And I see on a regular basis that large companies doing well expand, improve their companies and hire. The same with small businesses like myself.
The choice is clear, keep as many dollars in the private sector and have govt. make it easier for companies to spend the profits and expand their businesses and improve their businesses. Good workers will be in demand. Wages will rise. More people get hired.
Posted on 11/9/17 at 11:33 am to HailHailtoMichigan!
The linked article linked in the OP is a disingenuous straw man argument.
The question is NOT whether labor or capital pays corporate taxes that are already levied and in place. The author spends his whole article explaining how complicated it is to allocate the payment of taxes between labor and capital. He's doing that to distract you from the fact that he is answering the wrong question.
The QUESTION IS - if a portion of the taxes already levied and in place are removed, what then would the corporation do with the monies that were previously allocated to paying those taxes.
Remember when the TARP funds where distributed to corporations? The purpose of the "bail outs" were to provide the companies operating capital to carry them through the effects of the great recession.
Remember what the wall streeters did with the TARP money?
They gave themselves their regular year end bonuses!!!
What makes anyone think that corporations are going to give anything close to a majority of the funds they had allocated for taxes to labor?
There already is talk about "investing" the tax-cut money into stock buybacks and dividend payments.
Some portion may go to labor as pay raises, but anyone thinking that pay raises to labor will represent a significant portion of the whole is buying the bill of goods being sold by the charlatan who wrote the article - and those who paid him to write it, hoping you would buy it.
The question is NOT whether labor or capital pays corporate taxes that are already levied and in place. The author spends his whole article explaining how complicated it is to allocate the payment of taxes between labor and capital. He's doing that to distract you from the fact that he is answering the wrong question.
The QUESTION IS - if a portion of the taxes already levied and in place are removed, what then would the corporation do with the monies that were previously allocated to paying those taxes.
Remember when the TARP funds where distributed to corporations? The purpose of the "bail outs" were to provide the companies operating capital to carry them through the effects of the great recession.
Remember what the wall streeters did with the TARP money?
They gave themselves their regular year end bonuses!!!
What makes anyone think that corporations are going to give anything close to a majority of the funds they had allocated for taxes to labor?
There already is talk about "investing" the tax-cut money into stock buybacks and dividend payments.
Some portion may go to labor as pay raises, but anyone thinking that pay raises to labor will represent a significant portion of the whole is buying the bill of goods being sold by the charlatan who wrote the article - and those who paid him to write it, hoping you would buy it.
Posted on 11/9/17 at 7:23 pm to texridder
Perhaps the argument is that by cutting corp tax rates, more money available for investment is put into economy, which means more productive machines or more firm creation which raises demand for labor
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