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BenBurch · 7th December 2007, 09:02 PM

If corporations were not ever taxed, but we shifted all of the tax to the stockholders proportionately, it would no longer be possible to offshore assets to a tax haven because your ownership of the stock is that which is taxed, and you own it in whatever country you are a citizen.

JoeEllison · 7th December 2007, 09:06 PM

It wouldn't work, the rich folks would just purchase stock through overseas dummy corporations.

ARubberChickenWithAPulley · 7th December 2007, 09:07 PM

What part of stock holding are you talking about taxing? Simply holding stock doesn't result in anything taxable unless you sell the stock for a capital gain or are receiving dividends. And both of those are already taxed.

WildCat · 7th December 2007, 09:08 PM

Taxing stocks would be a terrible idea. As is taxing corporations, because no business pays taxes - their customers pay them. Any tax on a business is just a hidden tax on you. But so long as people are willing to believe the myth that businesses pay taxes the shell game will continue.

balrog666 · 8th December 2007, 08:34 AM

A very silly idea.

What are you trying to accomplish with such a proposal?

Beerina · 10th December 2007, 09:20 AM

Maybe if the government didn't tax so much, or do so much work granting loopholes to the competition, corporations wouldn't be trying to flee the confiscatory levels of taxation.

Tailgater · 10th December 2007, 11:38 AM

Wouldn't that pretty much kill any foreign investment too?

drkitten · 10th December 2007, 12:41 PM

Originally Posted by Beerina

Maybe if the government didn't tax so much, or do so much work granting loopholes to the competition, corporations wouldn't be trying to flee the confiscatory levels of taxation.

I doubt it. There is no level of taxation that companies will not try to avoid. In fact, they have a legal obligation to try to avoid tax to the greatest extent possible under law (look up "fiduciary duty").

linusrichard · 10th December 2007, 02:08 PM

Originally Posted by WildCat

Taxing stocks would be a terrible idea. As is taxing corporations, because no business pays taxes - their customers pay them. Any tax on a business is just a hidden tax on you. But so long as people are willing to believe the myth that businesses pay taxes the shell game will continue.

You say that this is a reason why taxing corporations is a terrible idea, but I think it's really a reason why taxing corporations is a great idea! If the business passes along the tax incidence to its customers, like you say, then the only people who have to pay are those who choose to pay, and the tax is spread out among them, and the business doesn't suffer, which is great for economic development! It makes me wonder why businesses go to such lengths to lobby legislatures for lower taxes, though.

In truth, though, I think the incidence falls on both consumer and corporation - the business raises prices (customers pay part of the tax), which results in fewer sales, which results in lower profits (business pays part of the tax).

tek · 10th December 2007, 02:54 PM

Originally Posted by WildCat

Taxing stocks would be a terrible idea. As is taxing corporations, because no business pays taxes - their customers pay them. Any tax on a business is just a hidden tax on you. But so long as people are willing to believe the myth that businesses pay taxes the shell game will continue.

Saying businesses don't pay taxes because the cost is passed on is like saying rain doesn't land on the ground because of evaporation.

I find it somewhat hypocritical most seeking the abolition of corporate taxation usually don't have any problem with the concept of corporate personhood. Seems unfair they as people can get out of both death AND taxes.

WildCat · 10th December 2007, 03:40 PM

Originally Posted by linusrichard

You say that this is a reason why taxing corporations is a terrible idea, but I think it's really a reason why taxing corporations is a great idea! If the business passes along the tax incidence to its customers, like you say, then the only people who have to pay are those who choose to pay,

The only way this could change consumer habits is if consumers started growing their own food, smelting their own metal, machining their own tools, growing their own textile crops from which to make their own clothes, etc etc. Because business expenses would drop across the board, and would make little difference from a business competition standpoint within the country. Now, you could argue that we'd lose the value of exports but there's no reason you couldn't place an excise tax on exports if you desire. But I think the money is better recovered through higher workers salaries that would likely result.

The real reason business taxes are popular is that the ignorant masses think the government is really sticking it to the man when the reality is far different.

WildCat · 10th December 2007, 03:45 PM

Originally Posted by tek

Saying businesses don't pay taxes because the cost is passed on is like saying rain doesn't land on the ground because of evaporation.

Uh, yeah, it's just like that!

Explain to me how the current tax scheme is really sticking it to those fat cat CEOs?

Quote:

I find it somewhat hypocritical most seeking the abolition of corporate taxation usually don't have any problem with the concept of corporate personhood. Seems unfair they as people can get out of both death AND taxes.

Like I said, please explain how it's really all those fat cat executives who are paying all these taxes. I haven't noticed how much they're hurting...

geni · 10th December 2007, 03:52 PM

Originally Posted by WildCat

Taxing stocks would be a terrible idea. As is taxing corporations, because no business pays taxes - their customers pay them. Any tax on a business is just a hidden tax on you. But so long as people are willing to believe the myth that businesses pay taxes the shell game will continue.

Corporations are a legal person thus they pay tax. As soon as they are prepared to stop being a legal person they can stop paying taxes. Corporation tax is simply societies way of reducing the net loss caused by corporations going bankrupt and not paying their bills (since guess who will end up paying the bills eventualy)?

WildCat · 10th December 2007, 04:32 PM

Originally Posted by geni

Corporations are a legal person thus they pay tax. As soon as they are prepared to stop being a legal person they can stop paying taxes.

Don't be silly. We have all kinds of taxes that can be applied differently or not at all to different classes of persons.

Quote:

Corporation tax is simply societies way of reducing the net loss caused by corporations going bankrupt and not paying their bills (since guess who will end up paying the bills eventualy)?

Never heard that one before, nor do I see the thought that drives it.

Suddenly · 10th December 2007, 05:14 PM

Originally Posted by WildCat

Never heard that one before, nor do I see the thought that drives it.

A corporation exchanges limited risk for double taxation, both corporate income and dividends are taxed. Small businesses can avoid this via being an S corp or an LLC type hybrid. Just a basic thing. Corporations are also supposed to be subject to laws governing their existence, but nobody seems to want to talk about that much when discussing the free market.

Has less than nothing to do with CEO pay. That is a whole different issue relating to boards of directors and cults of personality and a bunch of other garbage.

linusrichard · 10th December 2007, 05:47 PM

Originally Posted by WildCat

The only way this could change consumer habits is if consumers started growing their own food, smelting their own metal, machining their own tools, growing their own textile crops from which to make their own clothes, etc etc.

Not at all. Consumers could also consume less. Or they could consume substitutes.

Quote:

The real reason business taxes are popular is that the ignorant masses think the government is really sticking it to the man

You've said something like this a few times already, but you give no reason to believe this is true, and no reason to care.

You also didn't address the other thing I said. Look - the gov't levies taxes on a business, right? This is going to increase their costs. The business has to raise prices or lose profits. Elementary stuff. According to you, they always raise their prices at least the same amount as the tax. This seems doubtful, but moving on -- if they do raise prices, they will lose sales. Also elementary stuff. So if they're losing some money one way or another, how are they not bearing part of the incidence of the business tax?

WildCat · 10th December 2007, 06:29 PM

Originally Posted by linusrichard

Not at all. Consumers could also consume less. Or they could consume substitutes.

Why would it be rational to consume less? And there are no substitutes - the tax would be the same regargless of which brand/type you bought.

Quote:

You've said something like this a few times already, but you give no reason to believe this is true, and no reason to care.

I'm still waiting for one of you guys to explain the origin of moneys businesses use to pay taxes, if it doesn't come from their customers. No one has been able to explain it yet, can you?

Quote:

You also didn't address the other thing I said. Look - the gov't levies taxes on a business, right? This is going to increase their costs. The business has to raise prices or lose profits. Elementary stuff. According to you, they always raise their prices at least the same amount as the tax.

Ceteris paribus, yes. I don't see how it can be any other way.

Quote:

This seems doubtful, but moving on -- if they do raise prices, they will lose sales.

Generally true, but not always.

Quote:

Also elementary stuff. So if they're losing some money one way or another, how are they not bearing part of the incidence of the business tax?

Because every penny that business collects comes from their customers. the customers bear it all, any way you slice it.

WildCat · 10th December 2007, 06:34 PM

Originally Posted by Suddenly

A corporation exchanges limited risk for double taxation, both corporate income and dividends are taxed. Small businesses can avoid this via being an S corp or an LLC type hybrid. Just a basic thing. Corporations are also supposed to be subject to laws governing their existence, but nobody seems to want to talk about that much when discussing the free market.

Has less than nothing to do with CEO pay. That is a whole different issue relating to boards of directors and cults of personality and a bunch of other garbage.

I just don't see it as being society's problem if Company A can't pay its creditors, nor the rationale that corporate income taxes be used to pay for this.

Suddenly · 10th December 2007, 09:10 PM

Originally Posted by WildCat

I just don't see it as being society's problem if Company A can't pay its creditors, nor the rationale that corporate income taxes be used to pay for this.

There isn't a superfund being set up or anything. Taxes go into the general fund, and everybody gets to accept the cost of limited liability. As the corporate form also greatly increases liquidity it isn't all bad.

Francesca R · 11th December 2007, 05:31 AM

Originally Posted by WildCat

Taxing stocks would be a terrible idea. As is taxing corporations, because no business pays taxes - their customers pay them. Any tax on a business is just a hidden tax on you. But so long as people are willing to believe the myth that businesses pay taxes the shell game will continue.

Do you think that if corporation tax was reduced to zero tomorrow, the entire gain would be passed on to customers in the form of lower prices?

linusrichard · 11th December 2007, 07:09 AM

Originally Posted by WildCat

Why would it be rational to consume less? And there are no substitutes - the tax would be the same regargless of which brand/type you bought.

It would be rational to consume less because the cost goes up. I drink pop. If pop cost $4 a bottle, I would drink much less pop. If pop cost $20 a bottle, I would drink no pop. Maybe on my birthday.

As for substitutes, they don't have to be different brands/types of the same stuff - it can be different stuff. Let's say I drink beer over wine because it's cheaper. If beer gets taxed more than wine, to the point where wine is cheaper, I might start drinking wine. Let's say I manufacture Widgets out of Material X because it's cheaper than Material Y. Raise taxes on Material X high enough, and I'll start using Material Y.

Quote:

I'm still waiting for one of you guys to explain the origin of moneys businesses use to pay taxes, if it doesn't come from their customers. No one has been able to explain it yet, can you?

I don't get this. Obviously they come from the customers. But if the business doesn't get to keep as much money with the tax as it would without the tax, how is it not bearing some of the tax?

Quote:

Because every penny that business collects comes from their customers. the customers bear it all, any way you slice it.

Right, but without taxes, the business gets to keep every penny its customers give it. With taxes, it has to give away some of those pennies. Do you also think income taxes are borne by employers, because every penny that the employees get comes from their employers?

UserGoogol · 11th December 2007, 08:23 AM

Originally Posted by WildCat

Uh, yeah, it's just like that!

Explain to me how the current tax scheme is really sticking t to those fat cat CEOs?

As has already been said, passing taxes onto consumers lowers consumption. But also, everyone passes every tax onto everyone else. Regular middle class people will demand higher wages when income tax lowers their effective wage, thus "passing the tax" onto their employers. Whenever anyone is taxed, they adjust their economic behavior accordingly, and this effects everyone they trade with.

Of course, big corporations probably have more flexibility in how they can adjust their prices than workers can adjust their wages, so they can avoid facing the brunt of taxes to a stronger degree, but it's not simply like fatcat CEOs can simply magically wave their taxes away. Thus, it is unreasonable to assume that taxing corporations makes no difference over taxing their consumers directly.

geni · 11th December 2007, 01:18 PM

Originally Posted by WildCat

Don't be silly. We have all kinds of taxes that can be applied differently or not at all to different classes of persons.

Not remotely silly. If you don't set your company up as a coperation you don't pay coperation tax.

Quote:

Never heard that one before, nor do I see the thought that drives it.

Some of those unpaid bills will be to the state. The state has given you an advantage over non corperations in the form of limited liability. Seems reasonable that you should pay for it.

fxm · 12th December 2007, 04:58 AM

Originally Posted by linusrichard

In truth, though, I think the incidence falls on both consumer and corporation - the business raises prices (customers pay part of the tax), which results in fewer sales, which results in lower profits (business pays part of the tax).

Alternatives to raising prices are: reducing costs, which often translates to either reducing the number of employees or not paying them as much; or passing the profit hit along to shareholders via reduced dividend or reduced value of shares in the market because the profit numbers are lower.

Whether it's customers, employees, or shareholders, real people wind up paying for it somehow.

WildCat · 12th December 2007, 05:17 AM

Originally Posted by UserGoogol

As has already been said, passing taxes onto consumers lowers consumption. But also, everyone passes every tax onto everyone else. Regular middle class people will demand higher wages when income tax lowers their effective wage, thus "passing the tax" onto their employers.

Bingo! Now you see why I support this. It's about real people seeing what their tax burden really is, rather than the ignorant bliss that comes from hiding taxes in the cost of consumer goods.

WildCat · 12th December 2007, 05:19 AM

Originally Posted by geni

Some of those unpaid bills will be to the state. The state has given you an advantage over non corperations in the form of limited liability. Seems reasonable that you should pay for it.

That's not how limited liability works, at least not in the US. It doesn't protect the companies, only the personal assets of the owners.

drkitten · 12th December 2007, 07:34 AM

Originally Posted by WildCat

That's not how limited liability works, at least not in the US. It doesn't protect the companies, only the personal assets of the owners.

Yes, and that's a substantial protection for the owners of the company.

In exchange for that protection, the owners of the company pay a higher rate of taxes on their assets (their income is taxed twice, once as corporate income and again when they get personal income from the company).

If I run a dry-cleaning shop taking in $200,000 a year as a sole proprietorship, I can essentially run the company as an extension of my wallet. I will pay personal taxes on $200,000, but if someone sues me for losing their favorite pair of pants, I could lose everything, including my car, my summer home, and my retirement fund.

If I run the same shop, but as a corporation, I will pay corporate taxes on $200,000 plus personal taxes on whatever I pay myself, either as wages, dividends, whatever. That might well be the full $200,000 But my summer home and retirement fund are safe from nut-case lawsuits.

Protecting my retirement fund and summer home are a very valuable privilege indeed -- and one well worth paying for, yes?

Suddenly · 12th December 2007, 09:33 AM

Originally Posted by WildCat

That's not how limited liability works, at least not in the US. It doesn't protect the companies, only the personal assets of the owners.

It only protects the company when the company is really, really big, screws up in the face of adversity, and the government bails it out rather than put up with the mess of the market sorting itself out, disruption of services, unemployment, etc.

This isn't exactly an official protection, but it happens.

Francesca R · 13th December 2007, 02:26 AM

Originally Posted by WildCat

Bingo! Now you see why I support this. It's about real people seeing what their tax burden really is, rather than the ignorant bliss that comes from hiding taxes in the cost of consumer goods.

But corporation tax is not merely an extension of the customer's tax burden. Some of it is borne by employees, who could earn a higher gross wage if profits were untaxed, and some by suppliers who may be able to command a higher price for their inputs if the company they sell to is not taxed, and some of it is borne by shareholders who would experience higher earnings-per-share without tax.

Just because customers are the only one of this group of four who pay money over to the company (in return for goods/services), whereas the other three receive money from the company (in exchange for goods/services, human capital or investment capital) does not mean it is sensible to say customers bear all the impact of corporation tax.

Francesca R · 13th December 2007, 04:16 AM

Originally Posted by geni

Corporation tax is simply societies way of reducing the net loss caused by corporations going bankrupt and not paying their bills (since guess who will end up paying the bills eventualy)?

This isn't a justification for corporate tax that I have seen. Many people believe that limited liability is actually a public good, benefitting society by encouraging competitive profit-motivated enterprise. In that case there would be no need to charge for it.

7th December 2007, 09:02 PM	#1
BenBurch Gatekeeper of The Left Join Date: Sep 2007 Location: The Universe 35.2 ms ahead of this one. Posts: 32,498	On taxing corporations If corporations were not ever taxed, but we shifted all of the tax to the stockholders proportionately, it would no longer be possible to offshore assets to a tax haven because your ownership of the stock is that which is taxed, and you own it in whatever country you are a citizen.
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7th December 2007, 09:07 PM	#3
ARubberChickenWithAPulley Master Poster Join Date: Mar 2006 Location: Kentucky Posts: 2,152	What part of stock holding are you talking about taxing? Simply holding stock doesn't result in anything taxable unless you sell the stock for a capital gain or are receiving dividends. And both of those are already taxed.
	Last edited by ARubberChickenWithAPulley; 7th December 2007 at 09:07 PM.

8th December 2007, 08:34 AM	#5
balrog666 Eigenmode: Cynic Join Date: May 2004 Posts: 2,545	A very silly idea. What are you trying to accomplish with such a proposal?
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10th December 2007, 09:20 AM	#6
Beerina Sarcastic Conqueror of Notions Join Date: Mar 2004 Location: A floating island above the clouds Posts: 23,835	Maybe if the government didn't tax so much, or do so much work granting loopholes to the competition, corporations wouldn't be trying to flee the confiscatory levels of taxation.
	__________________ "Great innovations should not be forced [by way of] slender majorities." - Thomas Jefferson The government should nationalize it! Socialized, single-payer video game development and sales *now!* More, cheaper, better games, right? Right?

10th December 2007, 11:38 AM	#7
Tailgater Illuminator Join Date: May 2006 Posts: 3,212	Wouldn't that pretty much kill any foreign investment too?
Tailgater Illuminator Join Date: May 2006 Posts: 3,212

7th December 2007, 09:06 PM	#2
JoeEllison Cuddly Like a Koala Bear Join Date: Jul 2007 Location: Florida Posts: 7,276	It wouldn't work, the rich folks would just purchase stock through overseas dummy corporations.

7th December 2007, 09:08 PM	#4
WildCat NWO Master Conspirator Join Date: Mar 2003 Location: Albany Park, Chicago Posts: 49,471	Taxing stocks would be a terrible idea. As is taxing corporations, because no business pays taxes - their customers pay them. Any tax on a business is just a hidden tax on you. But so long as people are willing to believe the myth that businesses pay taxes the shell game will continue.

10th December 2007, 12:41 PM	#8
drkitten Penultimate Amazing Join Date: Mar 2004 Location: Wits' End Posts: 21,647	Originally Posted by Beerina Maybe if the government didn't tax so much, or do so much work granting loopholes to the competition, corporations wouldn't be trying to flee the confiscatory levels of taxation. I doubt it. There is no level of taxation that companies will not try to avoid. In fact, they have a legal obligation to try to avoid tax to the greatest extent possible under law (look up "fiduciary duty").

10th December 2007, 02:08 PM	#9
linusrichard Master Poster Join Date: Apr 2007 Location: Lansing, Mich. Posts: 2,668	Originally Posted by WildCat Taxing stocks would be a terrible idea. As is taxing corporations, because no business pays taxes - their customers pay them. Any tax on a business is just a hidden tax on you. But so long as people are willing to believe the myth that businesses pay taxes the shell game will continue. You say that this is a reason why taxing corporations is a terrible idea, but I think it's really a reason why taxing corporations is a great idea! If the business passes along the tax incidence to its customers, like you say, then the only people who have to pay are those who choose to pay, and the tax is spread out among them, and the business doesn't suffer, which is great for economic development! It makes me wonder why businesses go to such lengths to lobby legislatures for lower taxes, though. In truth, though, I think the incidence falls on both consumer and corporation - the business raises prices (customers pay part of the tax), which results in fewer sales, which results in lower profits (business pays part of the tax).

10th December 2007, 02:54 PM	#10
tek Scholar Join Date: Jun 2007 Posts: 57	Originally Posted by WildCat Taxing stocks would be a terrible idea. As is taxing corporations, because no business pays taxes - their customers pay them. Any tax on a business is just a hidden tax on you. But so long as people are willing to believe the myth that businesses pay taxes the shell game will continue. Saying businesses don't pay taxes because the cost is passed on is like saying rain doesn't land on the ground because of evaporation. I find it somewhat hypocritical most seeking the abolition of corporate taxation usually don't have any problem with the concept of corporate personhood. Seems unfair they as people can get out of both death AND taxes.
tek Scholar Join Date: Jun 2007 Posts: 57

10th December 2007, 03:40 PM	#11
WildCat NWO Master Conspirator Join Date: Mar 2003 Location: Albany Park, Chicago Posts: 49,471	Originally Posted by linusrichard You say that this is a reason why taxing corporations is a terrible idea, but I think it's really a reason why taxing corporations is a great idea! If the business passes along the tax incidence to its customers, like you say, then the only people who have to pay are those who choose to pay, The only way this could change consumer habits is if consumers started growing their own food, smelting their own metal, machining their own tools, growing their own textile crops from which to make their own clothes, etc etc. Because business expenses would drop across the board, and would make little difference from a business competition standpoint within the country. Now, you could argue that we'd lose the value of exports but there's no reason you couldn't place an excise tax on exports if you desire. But I think the money is better recovered through higher workers salaries that would likely result. The real reason business taxes are popular is that the ignorant masses think the government is really sticking it to the man when the reality is far different.

10th December 2007, 03:45 PM	#12
WildCat NWO Master Conspirator Join Date: Mar 2003 Location: Albany Park, Chicago Posts: 49,471	Originally Posted by tek Saying businesses don't pay taxes because the cost is passed on is like saying rain doesn't land on the ground because of evaporation. Uh, yeah, it's just like that! Explain to me how the current tax scheme is really sticking it to those fat cat CEOs? Quote: I find it somewhat hypocritical most seeking the abolition of corporate taxation usually don't have any problem with the concept of corporate personhood. Seems unfair they as people can get out of both death AND taxes. Like I said, please explain how it's really all those fat cat executives who are paying all these taxes. I haven't noticed how much they're hurting...

10th December 2007, 03:52 PM	#13
geni Anti-homeopathy illuminati member Join Date: Oct 2003 Location: UK Posts: 26,642	Originally Posted by WildCat Taxing stocks would be a terrible idea. As is taxing corporations, because no business pays taxes - their customers pay them. Any tax on a business is just a hidden tax on you. But so long as people are willing to believe the myth that businesses pay taxes the shell game will continue. Corporations are a legal person thus they pay tax. As soon as they are prepared to stop being a legal person they can stop paying taxes. Corporation tax is simply societies way of reducing the net loss caused by corporations going bankrupt and not paying their bills (since guess who will end up paying the bills eventualy)?

10th December 2007, 04:32 PM	#14
WildCat NWO Master Conspirator Join Date: Mar 2003 Location: Albany Park, Chicago Posts: 49,471	Originally Posted by geni Corporations are a legal person thus they pay tax. As soon as they are prepared to stop being a legal person they can stop paying taxes. Don't be silly. We have all kinds of taxes that can be applied differently or not at all to different classes of persons. Quote: Corporation tax is simply societies way of reducing the net loss caused by corporations going bankrupt and not paying their bills (since guess who will end up paying the bills eventualy)? Never heard that one before, nor do I see the thought that drives it.
	Last edited by WildCat; 10th December 2007 at 04:32 PM.

10th December 2007, 05:14 PM	#15
Suddenly No Punting Join Date: Jan 2005 Location: Montani Semper Liberi Posts: 2,645	Originally Posted by WildCat Never heard that one before, nor do I see the thought that drives it. A corporation exchanges limited risk for double taxation, both corporate income and dividends are taxed. Small businesses can avoid this via being an S corp or an LLC type hybrid. Just a basic thing. Corporations are also supposed to be subject to laws governing their existence, but nobody seems to want to talk about that much when discussing the free market. Has less than nothing to do with CEO pay. That is a whole different issue relating to boards of directors and cults of personality and a bunch of other garbage.
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10th December 2007, 05:47 PM	#16
linusrichard Master Poster Join Date: Apr 2007 Location: Lansing, Mich. Posts: 2,668	Originally Posted by WildCat The only way this could change consumer habits is if consumers started growing their own food, smelting their own metal, machining their own tools, growing their own textile crops from which to make their own clothes, etc etc. Not at all. Consumers could also consume less. Or they could consume substitutes. Quote: The real reason business taxes are popular is that the ignorant masses think the government is really sticking it to the man You've said something like this a few times already, but you give no reason to believe this is true, and no reason to care. You also didn't address the other thing I said. Look - the gov't levies taxes on a business, right? This is going to increase their costs. The business has to raise prices or lose profits. Elementary stuff. According to you, they always raise their prices at least the same amount as the tax. This seems doubtful, but moving on -- if they do raise prices, they will lose sales. Also elementary stuff. So if they're losing some money one way or another, how are they not bearing part of the incidence of the business tax?

10th December 2007, 06:29 PM	#17
WildCat NWO Master Conspirator Join Date: Mar 2003 Location: Albany Park, Chicago Posts: 49,471	Originally Posted by linusrichard Not at all. Consumers could also consume less. Or they could consume substitutes. Why would it be rational to consume less? And there are no substitutes - the tax would be the same regargless of which brand/type you bought. Quote: You've said something like this a few times already, but you give no reason to believe this is true, and no reason to care. I'm still waiting for one of you guys to explain the origin of moneys businesses use to pay taxes, if it doesn't come from their customers. No one has been able to explain it yet, can you? Quote: You also didn't address the other thing I said. Look - the gov't levies taxes on a business, right? This is going to increase their costs. The business has to raise prices or lose profits. Elementary stuff. According to you, they always raise their prices at least the same amount as the tax. Ceteris paribus, yes. I don't see how it can be any other way. Quote: This seems doubtful, but moving on -- if they do raise prices, they will lose sales. Generally true, but not always. Quote: Also elementary stuff. So if they're losing some money one way or another, how are they not bearing part of the incidence of the business tax? Because every penny that business collects comes from their customers. the customers bear it all, any way you slice it.

10th December 2007, 06:34 PM	#18
WildCat NWO Master Conspirator Join Date: Mar 2003 Location: Albany Park, Chicago Posts: 49,471	Originally Posted by Suddenly A corporation exchanges limited risk for double taxation, both corporate income and dividends are taxed. Small businesses can avoid this via being an S corp or an LLC type hybrid. Just a basic thing. Corporations are also supposed to be subject to laws governing their existence, but nobody seems to want to talk about that much when discussing the free market. Has less than nothing to do with CEO pay. That is a whole different issue relating to boards of directors and cults of personality and a bunch of other garbage. I just don't see it as being society's problem if Company A can't pay its creditors, nor the rationale that corporate income taxes be used to pay for this.

10th December 2007, 09:10 PM	#19
Suddenly No Punting Join Date: Jan 2005 Location: Montani Semper Liberi Posts: 2,645	Originally Posted by WildCat I just don't see it as being society's problem if Company A can't pay its creditors, nor the rationale that corporate income taxes be used to pay for this. There isn't a superfund being set up or anything. Taxes go into the general fund, and everybody gets to accept the cost of limited liability. As the corporate form also greatly increases liquidity it isn't all bad.
	__________________ Visit ElbowJobertski.com for all your fine comic literature needs, that is assuming all you want is on that site. It probably isn't, but so it goes.

11th December 2007, 05:31 AM	#20
Francesca R Girl Join Date: Nov 2006 Location: London EC1 Posts: 11,829	Originally Posted by WildCat Taxing stocks would be a terrible idea. As is taxing corporations, because no business pays taxes - their customers pay them. Any tax on a business is just a hidden tax on you. But so long as people are willing to believe the myth that businesses pay taxes the shell game will continue. Do you think that if corporation tax was reduced to zero tomorrow, the entire gain would be passed on to customers in the form of lower prices?

11th December 2007, 07:09 AM	#21
linusrichard Master Poster Join Date: Apr 2007 Location: Lansing, Mich. Posts: 2,668	Originally Posted by WildCat Why would it be rational to consume less? And there are no substitutes - the tax would be the same regargless of which brand/type you bought. It would be rational to consume less because the cost goes up. I drink pop. If pop cost $4 a bottle, I would drink much less pop. If pop cost $20 a bottle, I would drink no pop. Maybe on my birthday. As for substitutes, they don't have to be different brands/types of the same stuff - it can be different stuff. Let's say I drink beer over wine because it's cheaper. If beer gets taxed more than wine, to the point where wine is cheaper, I might start drinking wine. Let's say I manufacture Widgets out of Material X because it's cheaper than Material Y. Raise taxes on Material X high enough, and I'll start using Material Y. Quote: I'm still waiting for one of you guys to explain the origin of moneys businesses use to pay taxes, if it doesn't come from their customers. No one has been able to explain it yet, can you? I don't get this. Obviously they come from the customers. But if the business doesn't get to keep as much money with the tax as it would without the tax, how is it not bearing some of the tax? Quote: Because every penny that business collects comes from their customers. the customers bear it all, any way you slice it. Right, but without taxes, the business gets to keep every penny its customers give it. With taxes, it has to give away some of those pennies. Do you also think income taxes are borne by employers, because every penny that the employees get comes from their employers?

11th December 2007, 08:23 AM	#22
UserGoogol Master Poster Join Date: Sep 2002 Posts: 2,074	Originally Posted by WildCat Uh, yeah, it's just like that! Explain to me how the current tax scheme is really sticking t to those fat cat CEOs? As has already been said, passing taxes onto consumers lowers consumption. But also, everyone passes every tax onto everyone else. Regular middle class people will demand higher wages when income tax lowers their effective wage, thus "passing the tax" onto their employers. Whenever anyone is taxed, they adjust their economic behavior accordingly, and this effects everyone they trade with. Of course, big corporations probably have more flexibility in how they can adjust their prices than workers can adjust their wages, so they can avoid facing the brunt of taxes to a stronger degree, but it's not simply like fatcat CEOs can simply magically wave their taxes away. Thus, it is unreasonable to assume that taxing corporations makes no difference over taxing their consumers directly.
	__________________ Never attribute to malice that which can be adequately explained by stupidity. -- Hanlon's Razor Last edited by UserGoogol; 11th December 2007 at 08:26 AM.

11th December 2007, 01:18 PM	#23
geni Anti-homeopathy illuminati member Join Date: Oct 2003 Location: UK Posts: 26,642	Originally Posted by WildCat Don't be silly. We have all kinds of taxes that can be applied differently or not at all to different classes of persons. Not remotely silly. If you don't set your company up as a coperation you don't pay coperation tax. Quote: Never heard that one before, nor do I see the thought that drives it. Some of those unpaid bills will be to the state. The state has given you an advantage over non corperations in the form of limited liability. Seems reasonable that you should pay for it.

12th December 2007, 04:58 AM	#24
fxm Scholar Join Date: Jul 2006 Location: Santa Cruz, CA Posts: 51	Originally Posted by linusrichard In truth, though, I think the incidence falls on both consumer and corporation - the business raises prices (customers pay part of the tax), which results in fewer sales, which results in lower profits (business pays part of the tax). Alternatives to raising prices are: reducing costs, which often translates to either reducing the number of employees or not paying them as much; or passing the profit hit along to shareholders via reduced dividend or reduced value of shares in the market because the profit numbers are lower. Whether it's customers, employees, or shareholders, real people wind up paying for it somehow.

12th December 2007, 05:17 AM	#25
WildCat NWO Master Conspirator Join Date: Mar 2003 Location: Albany Park, Chicago Posts: 49,471	Originally Posted by UserGoogol As has already been said, passing taxes onto consumers lowers consumption. But also, everyone passes every tax onto everyone else. Regular middle class people will demand higher wages when income tax lowers their effective wage, thus "passing the tax" onto their employers. Bingo! Now you see why I support this. It's about real people seeing what their tax burden really is, rather than the ignorant bliss that comes from hiding taxes in the cost of consumer goods.

12th December 2007, 05:19 AM	#26
WildCat NWO Master Conspirator Join Date: Mar 2003 Location: Albany Park, Chicago Posts: 49,471	Originally Posted by geni Some of those unpaid bills will be to the state. The state has given you an advantage over non corperations in the form of limited liability. Seems reasonable that you should pay for it. That's not how limited liability works, at least not in the US. It doesn't protect the companies, only the personal assets of the owners.

12th December 2007, 07:34 AM	#27
drkitten Penultimate Amazing Join Date: Mar 2004 Location: Wits' End Posts: 21,647	Originally Posted by WildCat That's not how limited liability works, at least not in the US. It doesn't protect the companies, only the personal assets of the owners. Yes, and that's a substantial protection for the owners of the company. In exchange for that protection, the owners of the company pay a higher rate of taxes on their assets (their income is taxed twice, once as corporate income and again when they get personal income from the company). If I run a dry-cleaning shop taking in $200,000 a year as a sole proprietorship, I can essentially run the company as an extension of my wallet. I will pay personal taxes on $200,000, but if someone sues me for losing their favorite pair of pants, I could lose everything, including my car, my summer home, and my retirement fund. If I run the same shop, but as a corporation, I will pay corporate taxes on $200,000 plus personal taxes on whatever I pay myself, either as wages, dividends, whatever. That might well be the full $200,000 But my summer home and retirement fund are safe from nut-case lawsuits. Protecting my retirement fund and summer home are a very valuable privilege indeed -- and one well worth paying for, yes?

12th December 2007, 09:33 AM	#28
Suddenly No Punting Join Date: Jan 2005 Location: Montani Semper Liberi Posts: 2,645	Originally Posted by WildCat That's not how limited liability works, at least not in the US. It doesn't protect the companies, only the personal assets of the owners. It only protects the company when the company is really, really big, screws up in the face of adversity, and the government bails it out rather than put up with the mess of the market sorting itself out, disruption of services, unemployment, etc. This isn't exactly an official protection, but it happens.
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13th December 2007, 02:26 AM	#29
Francesca R Girl Join Date: Nov 2006 Location: London EC1 Posts: 11,829	Originally Posted by WildCat Bingo! Now you see why I support this. It's about real people seeing what their tax burden really is, rather than the ignorant bliss that comes from hiding taxes in the cost of consumer goods. But corporation tax is not merely an extension of the customer's tax burden. Some of it is borne by employees, who could earn a higher gross wage if profits were untaxed, and some by suppliers who may be able to command a higher price for their inputs if the company they sell to is not taxed, and some of it is borne by shareholders who would experience higher earnings-per-share without tax. Just because customers are the only one of this group of four who pay money over to the company (in return for goods/services), whereas the other three receive money from the company (in exchange for goods/services, human capital or investment capital) does not mean it is sensible to say customers bear all the impact of corporation tax.

13th December 2007, 04:16 AM	#30
Francesca R Girl Join Date: Nov 2006 Location: London EC1 Posts: 11,829	Originally Posted by geni Corporation tax is simply societies way of reducing the net loss caused by corporations going bankrupt and not paying their bills (since guess who will end up paying the bills eventualy)? This isn't a justification for corporate tax that I have seen. Many people believe that limited liability is actually a public good, benefitting society by encouraging competitive profit-motivated enterprise. In that case there would be no need to charge for it.