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In reply to the discussion: Graphic: Who Pays Taxes [View all]DirkGently
(12,151 posts)49. Please cite an economist who supports this idea?
Besides the empirical evidence that corporations do not in fact pass tax increases on to consumers, I think the common-sense logic you're leaning on is problematic.
They could have undercut their competition using those methods before the tax. Not relevant to the issue.
Well of course it's relevant. The fact is corporations en masse are not operating on some simplified ideal of the way competition or capitalism works, where anyone can just raise prices to try to make up for tax payments.
What the studies show is the core of the fallacy here -- corporate taxes are not somehow ineffectual. They pay them; the government gets them. There is no sort of free market magic bullet that locks consumer prices to corporate tax rates so the company never has to actually pay more.
I guess if you assumed all corporations are operating at perfect efficiency, in a uniform marketplace, with a static demand, and identical competitors, where all product pricing was locked to a rigid formula, you could make a theoretical case, but none of those assumptions are valid.
Think about it. Widget Co.'s taxes go up, so you automatically raise prices because your company can't survive without the precise level of net proceeds it currently has? Do you even need to do anything? What if your competitor is fine with simply paying more? What if they do want to compensate, but do it in another way? What if they are domestic / foreign and are taxed in a different way? What if people just don't want widgets at the higher price you think you require?
The whole thing extrapolates from conditions that don't exist. I guess you can argue that at some level, under some conditions, increased corporate taxes impact consumer pricing. But that's not the same thing as arguing that corporate tax levels are meaningless because corporations don't really "pay" taxes due to precisely passing them all along to consumers.
They might want to, or argue they're entitled to, but the reality is that they can't.
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It's cheaper and easier for the govt to police a few corporations instead of millions of Americans.
grahamhgreen
Dec 2015
#6
You'd like the people who get millions in salaries to get it tax free?
muriel_volestrangler
Dec 2015
#15
id rather have the corporations collect them cause then if i decide not to buy their product
saturnsring
Dec 2015
#5
if their tax rate was 20% and no one bought anythng they had to sell who would pay their 20%
saturnsring
Dec 2015
#13
That's not really correct. Companies generally don't keep prices "low" out of the goodness of their
MillennialDem
Dec 2015
#33
That only applies in a cartel or monopoly scenario, and in the cartel scenario it only
MillennialDem
Dec 2015
#37
Yeah it is but you're a true believer and no amount of evidence will change your view
MillennialDem
Dec 2015
#39
Nope. Corporations do not just "pass on" all the taxes they pay. They can't.
DirkGently
Dec 2015
#19
So you agree no economists think corporate taxes are "generally" passed on to consumers.
DirkGently
Dec 2015
#54
Economists establishing corporate taxes aren't passed to consumers was probably "the best."
DirkGently
Dec 2015
#73
I assume the material in this post was written by an academic "economist".
former9thward
Dec 2015
#51
If you look closely, you can just barely make out the system "fix" that Bill Clinton made
Bucky
Dec 2015
#4
I would agree to eliminating all corp. taxes in exchange for no corporate campaign contributions
Yavin4
Dec 2015
#26
Those "market forces" are working well for the corporations...for us, not so much...
Bigmack
Dec 2015
#64
They'll just whine that the $4,000 per year is letting them keep their own hard earned money - which
MillennialDem
Dec 2015
#35
Do the corporations get tax breaks for expense of lobbyists and politicians on the payroll?
Tierra_y_Libertad
Dec 2015
#46